The usual role of a Receiver is to enforce and protect the rights of a secured creditor to an entity at a time when the secured creditor believes their security is in jeopardy. In the case of a bank being the secured creditor, the Receiver acts to maximise the return to the bank.
A Receiver can be appointed to:
- a company;
- a partnership; or
- an individual.
There are two (2) methods of appointment as a Receiver:
- Private Appointment – by a secured creditor who is generally a financial institution (but who can also be a private individual or a company). This is done by the execution of a Deed of Appointment by the secured creditor and the appointed Receiver.
- Court Appointment – The Court can make an Order appointing a Receiver. This is generally as a result of a partnership dispute or an application by an oppressed shareholder.
- Private appointments are for more common and the receiver can be appointed to certain or all assets and can be given power to manage a company and the sale of its assets. Some appointments may be over a debtor ledger only so as to minimise the return to a secured creditor without incurring additional costs. The information of the personal properties security register in 2012 requires secured creditors to register their interest on the register.