What is Receivership via Security Holder?
Receivership is a process in which a legally appointed receiver acts as a custodian of a company’s assets or business operations.
A receivership is appointed either by a Court or the holder of a Security Interest in the property of the Company.
The receiver’s primary role is to collect and sell the company’s assets to repay the debt owed to the secured creditor.
In most cases, the receiver is given ultimate decision-making powers and has full discretion in deciding how to manage received assets.
If a receiver has, under the terms of their appointment, the power to manage the company’s affairs, they are known as a receiver and manager.
The receiver’s role is to:
- collect and sell enough of the charged assets (collateral) to repay the debt owed to the secured creditor (this may include selling assets or the company’s business);
- pay out the money collected in the order required by law; and
- report to ASIC any possible offences or other irregular matters they come across.