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Although Administration has become the normal process for a secured lender to seek to recover the debt owed by an insolvent company, it is still possible for a secured lender to appoint a Receiver. This could be a fixed charge receivership, where the lender has a charge on a property or on book debtors, and the Receiver sells or realises just those assets. Alternatively, it could be an Administrative Receivership, where the Receiver takes over the running of the company from the directors and realises all of the assets.
It is important that directors do not to allow the company’s position to deteriorate to such an extent that the secured lender decides to intervene by appointing a Receiver of any sort. Early engagement with the secured lender and appropriate planning are the keys to avoid a Receiver being imposed on the company.