Understanding Receivership: A Guide to the Legal Process

Receivership is a legal process in which a court appoints a person, known as a receiver, to take control of the assets and operations of a company or individual who is unable to pay their debts. The purpose of receivership is to manage the assets and distribute the proceeds from their sale to the creditors in an orderly and equitable manner.
Receivership can be voluntary or involuntary. Voluntary receivership occurs when the company or individual requests the appointment of a receiver, while involuntary receivership occurs when the court appoints a receiver at the request of one or more creditors.
The role of the receiver typically includes:
Collecting and selling the assets of the company or individual
Managing the day-to-day operations of the business
Paying off the debts and expenses of the company or individual
Distributing any remaining funds to the creditors
Receivership can be used in a variety of situations, such as:
To manage the assets of a bankrupt company
To recover debts owed by an individual or company
To protect the assets of a company or individual from being seized by creditors
To provide a way for creditors to recoup their investment in a failing business
To ensure that the assets of a company or individual are sold in an orderly and equitable manner.
Receivership can be a complex process, and it is important to seek the advice of a qualified attorney if you are considering or involved in a receivership proceeding.