Receivership is a remedy available to secured creditor to recover amounts outstanding under a secured loan in the event that the company defaults on the loan.
It is used as a debt collecting tool. A receiver is appointed under debenture deed that creates security over the Company assets or appointed by court.
The right to appoint a receiver must be clearly provided for under debenture deed.
- S.176 IA Receivership commence when the appointment takes effect (where it is a court appointment) or when the receiver accepts the appointment in writing.
- R.164 I.R Provides that such acceptance should be within seven days form date of appointment.
- S.178 (1) I.A and R.165 IR require the Receiver to give written notice to the grantor and shall not later than 14 days after commencement give public notice in Form 29 in Schedule 1 of Insolvency Regulations
Duties of a Receiver