There is no way around it; to do business, you will be more than likely working with creditors. However, when you find that you can no longer pay your debts to secured creditors, you may find yourself in receivership. This is a situation where a receiver is appointed to help deal with secured assets. The receiver is there to help assist in in selling off any assets that you can’t pay for so that money can be used to pay back the secured creditor. Principle Insolvency is here to talk about the receivership process so you know what to expect.
How a Receiver is Appointed
When a company gets to a point where a receiver is appointed, this is done one of two ways, either the company and the creditor come to a binding agreement that lays out how the debts will be repaid, or the court will appoint a receiver to handle it. It is essential that the receiver is a licensed insolvency practitioner to be appointed to the task and the receiver must file a notice of appointment with Registrar of Companies and give public notice of the appointment. At this point, the status of your company on the Companies Registrar will change to “in receivership.”
The Role of the Receiver
While we laid out the sole purpose of a receiver above, the receiver may be responsible for a few different things:
– Collect one or more assets and sell them to pay back the secured creditor.
– Manage any preferential claims against the company. This may include unpaid wages or monies owed to Inland Revenue.
– Will certainly be a licenses insolvency practitioner.
Director Responsibilities During Receivership
If you are a director and the company enters into receivership, you will more than likely still remain in your position. However, there will be a few changes. You won’t have the same powers that you had previous to receivership. They will be more restricted. You will be required to cooperate with the receiver so that the financial and business affairs of the company can be resolved. You will also be required to provide the receiver with the company’s accounts, records and any other information that they may need.
When Receivership Ends
Directors know that receivership ends when they are notified by the receiver. This will come complete with a final report detailing the outcomes and activities of the receivership. This summary should be complete with Ally he information you need to understand the process from beginning to end.
Insolvency Services in Auckland, Hamilton, Levin & New Zealand Wide
If your company is having a difficult time repaying their debts to secured creditors, you can turn to Principle Insolvency to help you move forward. If you are looking for a receiver, we will be able to help you navigate this difficult time and work with the secured creditors that you are struggling to pay. You can trust our team of highly qualified receivers and insolvency practitioners. Call us today!