Corporate Receivership
When a Receiver Takes Control,
We Take Action
✔ Non-judgemental, understanding advice.
✔ 24-hour FREE hotline.
✔ Urgent legal defence against asset seizure.
✔ Managing the Receiver and securing your rights.
✔ Challenging undervalued sales.
When You’re Facing Company Receivership
If your company is already under financial pressure, you can feel like you’re losing control. But, if a Receiver is then subsequently appointed, that feeling can become a harsh reality … your operation is no longer entirely under your management.
Under Corporate Receivership, the Receivers have the power to sell secured key assets, act purely in the interests of the secured creditor, and, in some cases, run your entire business.
But even at this stage, all isn’t lost.
At Ash Walker Lawyers, we bring targeted advice to defend your operation and your role as a director. Whether you believe Receivership is imminent, or a Receiver has already been appointed, we deliver understanding and compassionate guidance to help you take back control.
What Is Receivership?
During the course of their operation, companies typically take out loans, financing, or mortgages. In many cases, particularly when the sums are substantial, these borrowed funds are secured by banks and lenders on company assets.
Which means, if the business fails to repay, the creditor has the right to sell the assets to get its money back.
The Corporate Receiver is the person who steps in, acting in the interests of the secured creditor, to realise funds when you default.
Their power is outlined both in the loan or security agreement and Section 420 of the Corporations Act. Sometimes, their terms of appointment give them the scope not only to manage and sell assets … but also take over your business’s operational affairs … known as a Receiver and Manager.
What Can a Receiver Take Control Of?
When the Receiver is appointed, their reach isn’t arbitrary … it’s outlined in the original security agreement made when funds were lent. In most circumstances, they can’t come after everything your company owns.
Generally, there are two categories into which the secured assets can fall:
1. Non-Circulating (Fixed) Assets
These are physical assets that mustn’t be sold or replaced during the course of running your business. They include things such as land and buildings, plant and equipment, and vehicles and machinery.
2. Circulating Assets
The assets that you use to trade with every day. During normal business operations, you are allowed to sell or replace them. But, if you default, they can be seized. It often includes cash, stock, trade debts, and raw materials.
At Ash Walker Lawyers, the security agreement is often our initial point of legal challenge or defence … as it states precisely what the Receiver can control or sell. With understanding and clarity, we work ceaselessly to ensure the Receiver doesn’t overstep their powers.
Think Your Assets Are at Risk From the Receiver?
Is Administration and Receivership the Same?
No, although it’s understandable why they are confused, since both involve a third party becoming involved in your business, taking over control from directors, and managing the business’s assets.
The core difference is that the Receiver is an independent professional, working for a secured creditor … while the Administrator is a restructuring expert working for the benefit of both creditors and the company.
Voluntary Administration is usually a proactive strategy …. a powerful step that pauses most creditor action, and can sometimes supersede or limit the actions of a Receiver.
Voluntary Administration vs Receivership
| Voluntary Administration | Receivership | |
|---|---|---|
| Legal Basis | Corporations Act | Loan or Security Agreement and Corporations Act |
| Appointed By | Company Directors | A secured creditor |
| Duty | To all creditors and the company | To the appointing secured creditor |
| Aim | Rescue and restructuring, to save the company or achieve a better result for creditors than immediate liquidation | Seize and sell secured assets to settle a specific debt |
| Creditors that Benefit | All creditors | Usually only the secured creditor |
| Asset Control | All assets | Control of only the secured assets |
| Director Power | Directors' powers are suspended and transferred to the Administrator | Directors remain, but lose power over the secured assets |
| Director Consequences | Gives temporary protection:
|
May still face:
|
Learn More About Voluntary Administration
The Receivership Process
Receivership is a concerningly quick legal route that can seem unforgiving … with secured assets rapidly taken out of your control. But, it still must follow a legal sequence, giving your legal professional options to intercede at many steps.
1. Appointment
The secured creditor appoints a Receiver, and you receive:
- An appointment letter.
- Copy of the Receiver’s authority.
- Request for information such as financial records.
- Notification that the Receiver has filed a notice with ASIC, which puts it on the public record.
- Notice of your duty to cooperate with the Receiver.
2. Control of Assets
The Receiver takes control of secured assets, which may include, depending on the terms of agreement:
- Land and buildings.
- Business equipment.
- Stock.
- Debtors (accounts receivable).
- Intellectual property.
- Bank accounts.
3. Investigation
The Receiver will look at your books and records, examining:
- The company’s financial position.
- Its liabilities.
- The value of secured assets.
- If the business can continue.
- Potential misconduct or breaches.
4. Realising (Selling) Assets
This Receivership stage often involves selling secured assets to repay the creditor:
- The Receiver is under a statutory duty (s420A) to obtain the best price.
- Funds are distributed according to strict legal priority:
- Receiver’s costs, then
- Employee entitlements (circulating assets only), and finally
- The secured creditor.
Ash Walker Lawyers can challenge the sale process if assets are sold at an unreasonably low price.
5. Completion
When the debt is repaid … or if all the secured assets are sold … the Receiver then:
- Resigns.
- Gives the company back any surplus funds (or gives them to a liquidator if appointed).
- Lodges a final report.
- Is discharged by the secured creditor.
- Control of the entire company and its assets reverts to the directors (as long as there isn’t an Administrator).
Ash Walker Lawyers – Your Defence Against the Receiver
The Receiver is undoubtedly an imposing figure with extensive powers, but their reach does have limits … bound by Australian law and the specific terms of the security agreement. Ash Walker Lawyers is here as your ally, ensuring the Receiver doesn’t overstep their authority, shielding your business, and defending your rights.
Our Receivership Strategy
Challenge the Receiver Appointment
As insolvency experts, Ash Walker Lawyers thoroughly examines the validity of the underlying security agreement and the appointment process … identifying any crucial procedures or rule mistakes that might invalidate the Receiver acting.
Handling the Receiver
We can take over all correspondence and discussions from the Receiver. While we ensure that you are legally compliant and cooperative, it’s our duty to stop the Receiver from overstepping their authority or making unreasonable demands.
Addressing Personal Guarantees
Defence, advice, and guidance against any related personal guarantees that the appointing creditor may also look to enforce … defending your own assets, belongings, and home.
Shielding Unsecured Assets
Checking that all assets and property … which aren’t addressed in the original security agreement … are identified and protected from incorrect seizure by the Receiver.
Injunctions
If a Receiver acts outside the terms of their appointment … or attempts to seize unsecured assets … we can apply quickly for a Court injunction to prevent incorrect procedures.
Challenging Undervalued Sales
Receivers may sell assets quickly and cheaply to satisfy the secured debt. We scrutinise the sale process, ensuring the Receiver meets their legal duty to maximise realised value.
Restructuring Strategy
If your business is in financial distress, and hasn’t yet entered Receivership, we can advise on the effective use of Voluntary Administration, SBR, or other formal routes for a better outcome.
Going into Corporate Receivership can feel like you’re losing your hard work and livelihood. But, with understanding and proactive legal advice from Ash Walker Lawyers, a seemingly desperate situation can be turned into clarity and structure.
When To Talk to Ash Walker Lawyers About Receivership
The earlier you contact Ash Walker Lawyers, the more we can do to help. At the first signs of financial distress, speak to us … we can usually negotiate routes or implement strategies such as Safe Harbour, Restructuring, or Voluntary Administration before Receivership becomes a threat and your control is removed.
However, if it has reached the Receivership stage, you still have rights and options. Contact us straight away if:
- You receive a Default Notice – from a secured creditor.
- You’re issued a Notice of Intention – to appoint a Receiver.
- You receive a Final Payment Demand – under a mortgage or security agreement.
- A Receiver is appointed – and you receive written notification.
- The Receiver attends your premises – or their agents.
- Secured property is being collected – to be sold, or is being advertised for sale.
- There are disputes over what’s secured – the Receiver could be exceeding their authority.
- You are threatened with the enforcement of a personal guarantee – your own assets could be at risk.
Don’t Delay!
Ash Walker Lawyers … Your Lawyers in Corporate Receivership
The threat of Receiver action … or a Receiver actually arriving at your premises … is seriously stressful. Straight away, you’re worried about your company losing assets, its reputation, and your livelihood. The apparent financial and legal consequences you face can seem like there’s simply no hope.
But you can still defend your rights, and the interests of your company, with the relentless support of Ash Walker Lawyers.
Our Corporate Receivership service delivers genuine compassion and understanding, giving urgent and knowledgeable legal guidance that can shield your company, mitigate exposure, and challenge any overreaching in the Receiver’s actions.
With Ash Walker Lawyers, You Receive the Advantages Of:
FREE 24-hour Hotline
Receivership threats are serious, get rapid guidance at any time.
Immediate Assistance
With no time to hesitate, we deliver prompt advice and intervention.
Assistance Without Judgement
Providing the reassurance and support you need, without criticising or condemning you for your position.
Tailored Strategies
Routes that find the best outcomes for your particular company situation.
Acting as Your Voice
Tackling all correspondence, discussions, and negotiations with the Receiver and secured creditor.
Restoring Order to Chaos
Allowing you to feel back in control.
Is Your Company Facing Corporate Receivership?
Company Receivership FAQs
Is There a Pause on Creditor Action During Receivership?
No. Unlike Voluntary Administration and SBR, which give you breathing space from creditor enforcement … Receivership doesn’t offer your company this welcome pause.
Does It Cost My Company Money To Go Into Receivership?
You don’t pay the Receiver directly, since they are appointed by the secured creditor. However, the fees that the Receiver charges for their services, and any expenses they incur, come out of the funds realised from selling your assets.
Does Receivership Mean I Lose My Company?
Not necessarily. Receivership means that a third-party professional comes into your business and takes control of one or more of its secured assets. These assets may be sold, so you definitely lose control of them.
However, theoretically, you could lose your business if the assets seized and sold were crucial to your business’s operation … and with no financial ability to replace them, your company must shut.
Is Receivership Made Public?
Yes, Receivership goes on the public record. The Receiver files notice of their appointment with ASIC (Australian Securities and Investments Commission) …where anyone can do a company search and find your business.