14. Appointment and Functions of Receivers and Administrative Receivers

(1) A Company may, by instrument (the appointing instrument), give a Person (the appointer) power to appoint a Person for the purpose of getting in and selling any part of the Company’s property and applying the proceeds in reduction of a debt owing by the Company to the appointer.

(2) If the appointer appoints a Person under the power given to the appointer by the appointing instrument, the Person appointed (the appointee) is:

1. (a) if the property of the Company over which the Person is appointed consists of all or substantially all of the undertaking of the Company—an Administrative Receiver of the Company; or
2. (b) in any other case—a Receiver of the Company.

(3) The appointee must be an Insolvency Practitioner.

(4) The appointee has the Functions given to the appointee by the appointing instrument except so far as otherwise provided under these Regulations or the Rules, and is subject to the appointing instrument, these Regulations and the Rules in the Exercise of those Functions.

(5) If the appointee is an Administrative Receiver of the Company, the appointee has, inaddition to the powers given by the appointing instrument, the powers set out in Schedule 1 (Additional powers of Administrative Receivers).

(6) In the application of Schedule 1 to the appointee, a reference to relevant property of the Company is a reference to property of the Company for which the appointee is, or apart from the appointment of another Person as Receiver would be, the Administrative Receiver.

(7) The appointee or the appointor may apply to the Court for directions in relation to any particular matter arising in relation to the Exercise of the appointee’s Functions as Administrative Receiver or Receiver of the Company.

(8) On an application under subsection (7), the Court may give the directions, or may make the order declaring the rights of Persons before the Court or otherwise, as it considers just.

15. Notification of appointment of Receiver or Administrative Receiver

If a Receiver or Administrative Receiver has been appointed for a Company, every invoice, order for goods or services, or business letter, issued by or on behalf of the Company or the Receiver or Administrative Receiver, and on or in which the Company’s name appears, must contain a statement that a Receiver has been appointed.

16. Interaction of Administrative Receivers and Receivers

If an Administrative Receiver is appointed for a Company, any Receiver appointed before the appointment of the Administrative Receiver immediately vacates office, and a Receiver may not be subsequently appointed for any part of the Company’s property.

17. No duty to inquire about Administrative Receiver’s powers

A Person dealing with the Administrative Receiver of a Company in good faith and for value is not required to inquire whether the Administrative Receiver is acting within the Administrative Receiver’s powers.

18. Power of Administrative Receiver to dispose of charged property

(1) If, on application by the Administrative Receiver of a Company, the Court is satisfied that the disposal (with or without other assets) of any relevant property that is subject to a security interest would be likely to promote a more advantageous realisation of the Company’s assets than would otherwise be achieved, the Court may, by order, authorise the Administrative Receiver to dispose of the property as if it were not subject to the security interest.

(2) Subsection (1) does not apply to a security interest held by the Person by whom or on whose behalf the Administrative Receiver was appointed or to any security interest to which a security interest held by the Person has priority.

(3) It must be a condition of an order under this section that the following amounts must be applied towards discharging the amounts secured by the security:

• (a) the amount of the net proceeds of the disposal;
• (b) the amount (if any) required to make good the deficiency between the net proceeds of the disposal and the net amount that would be realised on a sale of the property in the open market by a willing vendor.

(4) If the condition mentioned in subsection (3) relates to 2 or more security interests, the condition must require the amounts mentioned in that subsection to be applied towards discharging the amounts secured by those security interests in the order of their priorities.

19. Administrative Receiver: as Company’s agent

The Administrative Receiver of a Company is taken to be the Company’s agent unless and until the Company Goes into Liquidation.

20. Administrative Receiver: vacation of office

The Administrative Receiver of a Company may at any time be removed from office by order of the Court (but not otherwise) and may resign the office by giving notice of the resignation in accordance with the Rules.

21. Report by Administrative Receiver

(1) If an Administrative Receiver is appointed for a Company, the Administrative Receiver must, within 3 months after the day of the appointment (or, if the Court allows a longer period, the longer period), send to all creditors of the Company (so far as the Administrative Receiver is aware of their claims and addresses) a report about the following matters:

• (a) the events leading up to the appointment, so far as the Administrative Receiver is aware of them;
• (b) the disposal, or proposed disposal, by the Administrative Receiver of any property of the Company and the conduct, or proposed conduct, by the Administrative Receiver of any business of the Company;
• (c) the amounts of principal and interest payable to the debt security holders of the Company and the amounts payable to preferential creditors of the Company; and
• (d) the amount (if any) likely to be available for the payment of other creditors.

(2) The Administrative Receiver must, within 3 months after the day of appointment (or, if the Court allows a longer period, the longer period), publish, in accordance with the Rules, a notice stating an address to which unsecured creditors of the Company may write for copies of the report to be sent to them free of charge.

(3) The Administrative Receiver must call a meeting of the Company’s unsecured creditors for the purpose of discussing the report, and must give the unsecured creditors not less than 14 days notice of the meeting.

22. Creditors committee

(1) If a meeting of a Company’s unsecured creditors is called under section 21(3) (Report by Administrative Receiver) by the Administrative Receiver, the meeting may establish a committee (a creditors committee) to Exercise the Functions given to the committee under these Regulations and the Rules.

(2) If a creditors committee is established under subsection (1), the committee may, on giving not less than 7 days notice, require the Administrative Receiver to attend before it at any reasonable time and give it the information relating to the Exercise of the Administrative Receiver’s Functions that it may reasonably require.