Fixed Charge Receivership

If a lender has a fixed charge e.g. mortgage over a property or other assets, it will usually have the power to appoint a Receiver to take control of the asset and sell it on behalf of the lender to repay its debt.

Fixed Charge Receivership

What is a Fixed Charge Receivership?

When a lender has a fixed charge such as a mortgage over a property or other assets like intellectual property or the goodwill of a business, it will usually have the power to appoint a Receiver to take control of the asset and sell it on behalf of the lender to repay its debt. This type of receiver can only deal with the assets charged but often also has extensive powers to run the business located at the property and divert the business income to the lender. A fixed charge Receiver is also sometimes described as an LPA Receiver where they have been appointed under the Law of Property Act 1925.

When can a breach of a loan agreement occur?

This type of receivership is not a formal insolvency procedure and should not be confused with Company Administrative Receivership. While Receivers are often appointed where the borrower has failed to repay a loan, this can also happen when there have been other breaches of the loan agreement, for example, when a loan-to-value or an interest cover covenant can no longer be met by the borrower.

Advice on Fixed Charge Receiverships

For more information on Fixed Charge Receiverships, we offer an initial free consultation to review the situation and make recommendations on the best way forward. If we think that Fixed Charge 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.

Helpful, supportive and clear advice about options

“We approached Steve Parker of Opus when our business, which was in the hospitality sector, began to get into difficulties. Steve was helpful and supportive and gave clear and timely advice regarding our options. Resultantly the company was placed into Administration which was handled by Steve and his team in a fair and very professional manner. As a consequence we were able to emerge with a much slimmed down business which has flourished over a number of years allowing us to build up considerable reserves sufficient to see us through any future period of uncertainty”

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