Frequently Asked Questions about Receivership
We have collated the most frequently asked questions in one place to help you find quick answers to important matters.
The role of a receiver revolves around three key areas
- Protect, collect, and sell: This process may involve selling some or all the company's assets to repay debts.
- Distribute: Payout any proceeds in the correct order as set out by legislation.
- Report: The receiver must provide ASIC with a detailed list of receipts and payments. They are to also inform the regulator of any possible offenses.
If your bank is planning to appoint a receiver it is likely that you have been unable to pay your debts on time. In this circumstance, the creditor is the bank that holds an interest in one of your non-circulating assets. This may include property, land, plant, or equipment.
The role of the receiver is to act on the behalf of the creditor (bank). It is important to protect your own interests and the best way to do so is by obtaining professional advice and representation.
Read more about Australian Debt Solvers receiverships services and how we can help.
A secured creditor is an entity that holds a secured interest in some or all company’s assets. This is usually in the form of a mortgage. Companies regularly obtain finance in the form of a loan and in the process provide company assets as a form of ‘security’. In this case, the financial institution that provided the loan is a secured creditor.
There are several key differences between the three and they are made clear in the roles carried out by each party.
- A receiver is appointed by a secured creditor that holds an interest in some or all the company’s assets. Their role is to collect and sell assets to repay debts owed to the secured creditor.
- The role of an administrator is to examine the company and report to its creditors. The report will outline information on company assets, management of affairs, processes, and current financial circumstances. Recommendations will also be provided.
- In comparison, a liquidator has a responsibility to all company creditors. Their task is to protect, collect, and sell all company assets. The proceeds are then distributed to creditors with an inquiry into the failure of the company also conducted.
Read more about the difference between receivership, administration, and liquidation.
‘Controller’ refers to a person who is in control of a property for the purpose of enforcing a mortgage or charge. A receiver is commonly referred to as a controller. Read more about the receivership
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Receivership Resource Centre
Want to learn more about receivership or how to appoint a receiver and manager? Check out the Australian Debt Solvers Resource Centre featuring detailed information from industry professionals.
Receivership News
Want to learn more about the receivership process and legal requirements? Expand your knowledge and understanding by taking a closer look at real-life case studies.