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Administrative Receivership is often referred to simply as ‘receivership’.
If your company has breached the terms of its borrowing from a secured creditor with a floating charge over a significant part of your company’s assets, that creditor has the option of appointing an Administrative Receiver to recover the monies you owe. You may have given your bank such a charge, for example, as security for your borrowing.
The Administrative Receiver will look to sell the assets of your company in order to repay the sums owed to your secured creditor.
Impact on your business of Administrative Receivership?
The Administrative Receiver may continue trading with a view to selling your business as a going concern. This approach is likely to generate a higher return than simply selling individual assets. A sale gives the business a chance to trade under new management.