This is an extract of our Corporate Mortality document, which we sell as part of our Corporations Law Notes collection written by the top tier of Monash University students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Corporations Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Topic 12: Corporate Mortality
1. Receivership a. Definition: secured creditor appoints a receiver to take possession of the secured property, sell it
and, out of the proceeds, repay the secured debt owed to it i. If you are about to do business with a company, and you hear they have appointed a
receiver, you will avoid the company. Anyone who has security runs in to enforce their
security. Generally, after this, company's go into liquidation and shuts. b. Who is a receiver?
i. A person who, on behalf of a security holder, sells company property that has been
provided by the company as security for a loan
c. Who is a 'receiver and manager'?
i. A person who, on behalf of a security holder, manages a company's business, where
security is over the whole undertaking ii. Has to be registered with ASIC as a liquidator and has to be independent d. When can a receiver be appointed?
i. As per the loan / security agreement between the lender and the company ii. it is a contractual relationship, you negotiate the triggers that allow the receiver to be
appointed. Usually a cycle of no payment, or that other creditors are taking action. e. What are the receiver's powers?
i. As per the loan / security agreement between the lender and the company and s 420 of
the Corporations Act ii. Very wide - depends on the nature of asset provided as security - may include:
1. carry on company's business
2. convert company's property into money
3. borrow on security
4. execute documents
5. bring/defend proceedings in company's name
6. use company's common seal
7. hire/fire employees
8. appoint agents
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