Receivership is where a Receiver is appointed to realise the assets or manage the business of a company for the benefit of the secured creditors.
The primary duty of a Receiver is to get the best return for the secured creditor (usually the bank). Business survival may be an outcome. Receivership can result in the rescue of viable parts of a business. It can lead to the sale of certain assets or the sale of the whole of the business. It can also lead to the business ceasing to trade and company liquidation.
Receivership differs from liquidation in that the assets are realised for the benefit of the one secured creditor who appointed the Receiver. In liquidation the assets are realised for the benefit of all creditors in a specific order of priority (secured creditors and preferential creditors such as employees and IRD get their money before unsecured creditors).
1 Read here for an article on the role of a Receiver
2 Click here for a Receivership Life Cycle chart
3 Download our free guide to Receiverships