Receiverships Act 1993

31: Powers of receiver on liquidation or bankruptcy

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"What powers a receiver has when a company is in liquidation or someone is bankrupt"

Illustration for Receiverships Act 1993

If a company is being wound up or has been put into liquidation, or if someone has been adjudged bankrupt under the Insolvency Act 2006, a receiver can still be appointed or keep acting as a receiver. You can think of a receiver as someone who helps manage the property of a company or person who is in financial trouble. The receiver has certain powers, but they can only use them if the court says it is okay, unless the court orders otherwise.

When a receiver is acting for a company or person who is in liquidation or bankruptcy, they can only act as the agent of the person who appointed them with the court's approval or with the written consent of the liquidator or the Official Assignee. This means the receiver needs permission to make decisions on behalf of the company or person. If the receiver does not get this permission, they do not automatically become the agent of the person who appointed them.

If a receiver does something that creates a debt or liability for the company or person they are acting for, and they have the necessary permission, this debt is not considered a cost of the liquidation or bankruptcy process. You should understand that the receiver's actions can have consequences, but in this case, the debt is not passed on to the liquidation or bankruptcy process.

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31Powers of receiver on liquidation or bankruptcy

  1. Subject to subsection (2), a receiver may be appointed or continue to act as a receiver and exercise all the powers of a receiver in respect of property of—

  2. a company that is being wound up or that has been put into liquidation; or
    1. a debtor who has been adjudged bankrupt under the Insolvency Act 2006
      1. unless the court orders otherwise.

      2. A receiver holding office in respect of property referred to in subsection (1) may act as the agent of the grantor only—

      3. with the approval of the court; or
        1. with the written consent of the liquidator or the Official Assignee, as the case may be.
          1. A receiver who, by reason of subsection (2), is not able to act as the agent of the grantor does not, by reason only of that fact, become the agent of a person by whom or in whose interests the receiver was appointed.

          2. A debt or liability incurred by a grantor through the acts of a receiver who is acting as the agent of the grantor in accordance with subsection (2) is not a cost, charge or expense of the liquidation or the administration of the bankrupt's estate.

          Notes
          • Section 31(1)(b): amended, on , by section 445 of the Insolvency Act 2006 (2006 No 55).