Necessary things for receivership-bankruptcy, Financial Accounting

Necessary things for Receivership

If no power to appoint a receiver is given by the terms of issue, the trustee for the debenture holders, or a debenture holder acting on behalf of himself and others, may ask the court to appoint a receiver.  Before such an appointment will be made it will be necessary for the applicant to show that:-

(a)    Default is made in payment of principal or interest
(b)    The company is being wound up, or
(c)    The security is in jeopardy.

An appointment will be made under (c) where there is a serious risk that the security may be seized to satisfy claims which do not rank in priority to those of the debenture holders, e.g., where unsecured creditors obtain a judgement and levy execution; but mere insufficiency of the security is not itself "jeopardy" re (New York Taxicab Co).

A body corporate may not be appointed S.345 (Companies Act 1962), nor an undischarged bankrupt, except under an appointment by the court S.346. The official receiver may be appointed if the company is being wound up by the court S.347.

The duties of a receiver are to get in and realise the assets subject to the charge - he has no power to carry on the business of the company; if such a power is required, as where there is a floating charge on the company's business or undertaking and it is desired to sell the business as a going concern, the receiver (or some other person) may be appointed manager to carry on the business for this purpose: if appointed by the court this will be for a limited period, usually three months.

Posted Date: 12/13/2012 1:51:35 AM | Location : United States







Related Discussions:- Necessary things for receivership-bankruptcy, Assignment Help, Ask Question on Necessary things for receivership-bankruptcy, Get Answer, Expert's Help, Necessary things for receivership-bankruptcy Discussions

Write discussion on Necessary things for receivership-bankruptcy
Your posts are moderated
Related Questions
What are some examples of adjusting entries that are made at the end of the accounting period to bring general lever accounts balance in accordance with GAAP.

For each of the ratios listed below, indicate by the appropriate code letter, whether itis a liquidity ratio, a profitability ratio, or a solvency ratio. Code: L=Liquidity rati

To decide in what zone should be placed a store which sells video-cassettes, the manager of a firm which sells and rents cassettes makes a study to estimate the demand for each sto

In January 2013, Mitzu Co. pays $2,600,000 for a tract of land with two buildings on it. It plans to demolish Building I and build a new store in its place. Building 2 will be a co

The IRS is conducting a transfer pricing examination of USAco, a wholly-owned U.S. subsidiary of FORco. USAco purchases widgets from FORco for resale in the United States. The IRS


Bankrupt person A bankrupt is a person against whom an adjudication order has been made by the court primarily on the grounds of his insolvency. Any person (other than a body c

Using the profitability index, which of the following projects should be accepted? Project M:  NPV = $60,000     NINV =    $200,000 Project N:  NPV = $10,000     NINV =     $

You are an analyst in the corporate finance department of Pet Products, Inc. You have been asked to analyze a potential new product to be introduced. The beef-flavored water will b

Q. What do you mean by Fiscal Year? Fiscal Year - Period of 12 consecutive months chosen by an entity as its ACCOUNTING period that may or may not be a calendar year. Fixed Ass