Corporate Insolvency
When secured creditors leverage control
Secured creditors appreciate that what they've loaned or provided is worth protecting and use security interests to sure up their position in cases where payment or business relationship expectations aren't being satisfactorily met. Unlike other corporate insolvency appointments, the receiver's duty and focus is primarily to the secured creditor who made the appointment.
Background
A receivership's purpose is for a secured creditor to take control via a third-party known as a receiver (or receiver and manager) to assume control of some or all of the company's assets. A receiver taking control means potentially protecting, collecting, and selling those assets to repay the debt owed to the secured creditor.
.png?auto=format,compress&cs=tinysrgb&fit=crop&crop=focalpoint&fp-x=0.37&fp-y=0.34&fp-y=0.1&w=600&h=400&q=25&blur=5&sat=-100)
Delve into the latest news and insights from the Worrells teams on receivership.
.png?auto=format,compress&cs=tinysrgb&fit=crop&crop=focalpoint&fp-x=0.37&fp-y=0.34&fp-y=0.1&w=800&h=480&q=25&blur=5&sat=-100)
FAQs
A secured creditor can take action to protect, collect and sell some or all the company’s assets. This is done for the company to repay debts owed to the secured creditor.
A secured creditor holds a security interest, such as a mortgage, in some or all the company’s assets, to secure a debt they are owed by a company. For example, lenders might require a security interest in company assets when they provide a loan.
An unsecured creditor does not hold a security interest in relation to a debt they’re owed by a company. However some some types of employees ( as creditors) take priority in insolvency administrations to certain limits and conditions.
Dual insolvency appointments can be made over the same company when there's a receiver (or receiver and manager) appointed for a secured creditor. This means an unsecured creditor can apply to court to place the company into liquidation to recoup on an unpaid debt they're owed.
We speak with people and their advisors every day. We do this as complimentary and without expectation.
Principal, Gold Coast, Northern NSW
Principal, Gold Coast, Northern NSW
Principal, Western Sydney, Central West
Principal, Western Sydney, Central West
Principal, Canberra, Wollongong
Principal, Canberra, Wollongong
Principal, Melbourne, Ringwood
Principal, Melbourne, Ringwood
Principal, Perth
Principal, Perth
Business can be tough
Our team is focused and ready to help
Get in touchSubscribe for all the latest help and news
Subscribe