Receivership

Receivership occurs when a secured creditor appoints a receiver to take control of specific secured assets, or in some cases the whole business, to recover what is owed, and is distinct from liquidation in that the company itself may continue to exist and, in some cases, keep trading under the receiver's control while the appointment runs. Receivership is generally triggered by a company defaulting under a secured facility, and the receiver's primary duty is to the appointing secured creditor rather than to the company or its other creditors more broadly. A business or its directors seeking to refinance out of receivership need to satisfy a new lender that the underlying cause of the appointment has been resolved and that the business, once refinanced, is genuinely viable going forward, which typically means specialist funds or private lenders comfortable assessing a turnaround story rather than a mainstream bank. Refinancing out of receivership generally requires repaying the appointing creditor in full as part of settlement, alongside satisfying the incoming lender's own conditions.

Related

Debt restructure & workout loans · Liquidation · Refinance