Opus national network grows with Nottingham office
January 20, 2021
A charge holder with a floating charge can appoint an Administrative Receiver if they hold security that pre-dates the Enterprise Act. Preventing your company from being forced into Receivership depends on how quickly you engage with the charge holder. Alternatively you maybe the holder of a charge that entitles you to appoint Receivers.
Administrative Receivership is an insolvency process initiated by a secured creditor with the benefit of a floating charge, usually a bank or a financial institution, where there has been a breach of the facility that has not been remedied by the borrower.
Administrative Receivers are appointed to sell the business and assets of the company in order to repay the sums owed to the secured creditor. It is a procedure used increasingly less often because the security under which receivers are appointed must have been dated before 15 September 2003.
A debenture is the most common type of collateral given by a borrower to a lender to secure its debt. It usually gives the lender both fixed and floating charges over all of a borrower’s assets. By taking a debenture, a lender not only feels that their debt is safer, but it gives them a mechanism for taking control of the assets through the appointment of Administrative Receivers, who then sell them to repay all or as much of the outstanding debt and interest as possible.
Preventing your company from being forced into Administrative Receivership depends on how far the lender has gone towards appointing Receivers and how quickly you take action after becoming aware that the secured creditor is planning to make such an appointment. If you have already breached the terms of your banking or loan agreement, you should contact us as soon as possible to discuss the alternative options which may still be available.
For more information on Administrative Receiverships, we offer an initial free consultation to review the situation and make recommendations on the best way forward. If we think that Administrative Receiverships is the best route forward, our specialists can support the business at every step of the way through the process.
Contact our Head Office on +44 (0) 20 3326 6454 to arrange a no obligation and confidential call with one of our Partners.
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