Receivership involves the secured creditor, via the Receiver, taking control of your company’s assets – usually to protect, collect or sell. The purpose of this is so the company can repay debts owed to the secured creditor.

The secured creditor can appoint a Receiver where they hold the relevant security interest. This
includes a non-circulating security interest or a circulating security interest. A company in receivership may also be in liquidation, voluntary administration or subject to a DOCA.

  • Role of the Receiver

    Generally, the Receiver’s role is to:

    • Collect and sell sufficient secured assets to repay the debt owed to the secured creditor. This
      can include selling the company’s business.
    • Pay out the money collected in the order required by law.
    • Report any possible offences or irregular matters they review to ASIC.

    The Receiver has a principal duty to the secured creditor, but also holds an obligation to unsecured
    creditors to take reasonable care to sell secured assets for not less than market value or, where no
    identifiable market value, the best price reasonable obtainable.

  • Finalisation of Receivership

    The receivership will usually end when the Receiver has fulfilled their role. Generally, the Receiver
    resigns or is discharged by the secured creditor and full control of the company, and any remaining
    assets, reverts to the directors.