Re: FN-FORUM: Recievership

date posted 1st May 2006 21:53

On 1 May 2006, at 13:58, Creative Digital Alliance wrote:

> Got a letter friday telling me my main client has gone into
> recievership, and to let the recievers know how much they owe me,
> (quite a lot, approx 8k!). What are my chances of getting paid, and
> how long can I expect to wait to learn the outcome, anyone know?

As others have pointed out, there is a clear procedure to this, which =20=

you probably want to familiarise yourself with. This is my limited =20
understanding of it, apologies for any mistakes:

First off, let's just ask, is this an appointed administrator, an =20
administrative receivership, or has an official receiver been =20
appointed as part of liquidation proceedings? The difference is =20
significant.

If an administrator has been appointed - normally done by a creditor =20
with a loan secured against assets - the job is actually to try and =20
rescue the company as a going concern, and if that isn't possible to =20
sell the assets so as to recover as more of the secured loans than =20
going into liquidation would. In such a case, your chances of getting =20=

your money might actually be quite high, but unless somebody has got =20
their wires crossed this would never be described as 'receivership'.

Administrative receiverships typically happen when a company has a =20
loan, is then unable to repay that loan, the lender then appoints =20
somebody in an attempt to recover the amount lent (which has the =20
right to do as part of the security of lending the money in the first =20=

place) by selling assets piecemeal, but keeping the company running =20
isn't top job. Alas for you, the main job here is to recover money =20
owed to secured lenders.

If they're in liquidation, your client is where they are because one =20
of two things happened:

- They proposed a Creditor's Voluntary Liquidation at which point =20
they should have passed a resolution stating the company could not =20
continue and then invited the creditors to a meeting who would then =20
appoint an official receiver

- They're being wound up as a compulsory liquidation under a court =20
order. The court order can be applied for by a creditor, and that =20
would suggest your client has a bigger creditor in the queue in front =20=

of you.

If there are secured loans held by the company, they're going to get =20
paid before you get a look in, and as somebody else pointed out HMR&C =20=

get to jump the queue too. Your chances will be determined purely on =20
the basis of how big their debts are and how valuable their assets =20
are. Bid debts + small assets =3D little guys get screwed. Little debts =20=

+ big assets (but still insolvent and with a nasty creditor, =20
otherwise they wouldn't be here) =3D good chance for you.

I hope you get your bills paid and find another client! Getting your =20
=A38 though, has to be seen as a bonus I'm afraid, not something I =20
think you can expect. :-(

--
Paul Robinson=