A receiver may also be appointed over a specific asset of a debtor as opposed to over all the assets. This type of receivership is referred to as a specific asset receivership and can occur when a secured creditor holding a charge over a specific asset along with the right to appoint a receiver elects to enforce their rights and take possession of their specifically charged asset.
A seldomly used remedy, but effective where a creditor has a specific security over a large asset or an asset of high value. This type of appointment can narrow the receiver’s focus and scope of work which may assist in reducing the cost of enforcement against a debtor.
A receiver appointed in this capacity is still obligated to notify publicly of the receivership however their involvement in the company’s affairs is limited to securing and realising the specific asset appointed over.
An alternative to appointing a receiver to a specific asset would be asset recovery as agent of the secured creditor. This would involve an engagement acting as the secured party’s agent to find, secure and realise any asset subject to its security.
If you are a creditor holding security over an asset of a company and need to discuss your enforcement options, please contact us to discuss how we can assist you in achieving a result.
Other areas in Receivership: GSA
