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

DELEGATION A trustee cannot deleget unless: 1.    It is necessary or in the ordinary course of administration; or 2.    Authorised by the trust instrument; or 3.    Authorise

On December 31, 2010, the stockholders' equity section of Arndt, Inc., was as follows: Common stock, par value $10; authorized 30,000 shares; issued and outstanding 9,000 shares $

Q. What is Completion Report? The object of a completion report is to compare the cost of work actually constructed with those provided for in the last sanctioned estimate. A com

Financial Institution - Organization engaged in any of the many aspects of finance involving thrift institutions, commercial banks, securities brokers, investment banks and dealers

What was the business strategy underlying the merger? How was the acquisition financed? Was it a vertical, horizontal or conglomerate merger?   The strategy behind those merge

Property, plant and equipment Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4

As a recently hired accountant for a small business, Bearing, Inc., you are provided with last year's balance sheet, income statement, and post-closing trial balance to familiarize

under gaap, are proceeds from capital lease obligation reported in the statement of cash flow and why