Insolvency

Receivership

Introduction

* Receivership = external administration which may apply to corporations, partnerships and individuals.

* Most common = corporate receivership with secured creditor appointing a receiver to a company which has defaulted loan contract.

* Non-corporate most common = partnership dispute.

* SC (HC, FC and FMC also have power) also has inherent power for appointing receivers ---> codified---> now statute based

* Privately appointed don't get benefit of taking action in foreign countries Cross-Border Insolvency Act 2008 (Cth)

Part 5.2 of the Corporations Act (CA)

* 5.2 = appointment of receivers + regulation of corporate receiverships + mortgagees and their agents who enter into possession of secured property

* Controllers ( s 9)

"controller" , in relation to property of a corporation, means:

                     (a)  a receiver, or receiver and manager, of that property; or

                     (b)  anyone else who (whether or not as agent for the corporation) is in possession, or has control, of that property for the purpose of enforcing a security interest;

Includes 2 or more persons appointed as controllers (s 434F)

Types of Receivers

Receivers - privately appointed or court appointed

* Usu. appointed by a secured creditor when assets of company are under threat.

* Terms set out in terms of security instrument.

* Investigating accountant to review company financial position.

* If investigative report says its ok to restructure then its fine otherwise undergo receivership.

* Receivership in this case = privately appointed.

* Court may also appoint a receiver on an application being made by a party who seeks to protect its interests, or on application of ASIC, in order to pursue its regulatory role = court appointed.

* Comes in 2 forms:

* ASIC = Corporations Act 2001...