Yes, in many cases a company continues to trade during receivership, particularly where the receiver believes a going concern sale will achieve a better return for the secured creditor than a break-up of assets. The receiver effectively steps into the shoes of management for the secured assets and may retain staff, continue fulfilling contracts, and maintain customer relationships to preserve value. However, the receiver’s primary obligation is to the appointing creditor, not to employees, unsecured creditors, or shareholders. Directors remain in place but lose control over the assets covered by the security. Trading in receivership is always with the objective of achieving the best possible outcome for the secured lender.
