Receivership occurs when a secured creditor — usually a bank — appoints a receiver over a company’s assets to recover money owed to them. The receiver’s primary duty is to the appointing creditor, not to the company or its directors. The receiver takes control of the secured assets, which may include property, debtors, or the entire business, and realises them to repay the debt. The company may continue to trade during receivership or be sold as a going concern. Directors lose control of the assets covered by the security, though they retain their role in other respects.
