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
Can you do the attached quections by Monday?

Lockheed Martin's management wishes to find out whether they have excess debt capacity. Its current market value of equity is $40 b and its book value of debt is $


Ely purchased a patent (with a remaining legal life of ten years) from Backo on January 1, 2010 for $300,000. Ely expected to use the patent for five years. The carrying value on B

Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. Date Face Amount Term Interest Rate 5. Nov. 15 $54,000 60days 6% 6. Dec. 27 $40,500

POWERS OF INVESTMENT The trustees have a duty to obtain control of trust assets and to invest trust funds in authorised securities.   The trustees may invest in such securities

State the Accounting as an information system We know that accounting can be seen as provision of a service to 'clients'. Another way of viewing accounting is as a part of busi

Generally Accepted Accounting Principles (GAAP) are guidelines for companies to follow as tehy prepare and issue financial statements. Let's start by getting an understanding of wh

You will gain welfare from consuming bread and chocolate. Your welfare is described numerically by W = 4B + 2C, where B denotes the quantity of bread you choose to consume, and C d

LANDLORD'S RIGHT OF DISTRESS The Landlord's right to distrain for arrears of rent is not lost on the tenant's bankruptcy, but 1) Distress can only be levied after commencement