Receivership?

AckwelFoley

Im getting married in 3 weeks. The hotel have rang us this morning and told us that they are gone into reveivership.

We have 3000 euros paid in already, The owners tell us that they will still be operating and that the wedding is fine

I am aware for the concept, but what exactly happens when a business goes into receivership?

Im in a serious panic now

dbran

Hi

Sorry to hear about your troubles. It is not great news.

There is a difference between a RECEVERSHIP and a LIQUIDATION. In the case of a receivership, the bank has basically said that it is taking control of the assets that its loan is secured on and is going to enforce the charge on those assets ie sell them so that they are paid. It does not technically mean that the company has to cease to trade although it invariably does result in this most times.

In the case of a liquidation the company has to cease trade immediately and be wound up.

So you do need to make a decision as to whether you trust that the company can continue to trade and whether they will be able to honour their obligation to you. You could try and get a look at the last accounts of the cmpany in CRO to see what state they are in. But I suspect that you will have little choice but to hope that everything will be OK. Dont give them any more money unless they perform the service.

Hope this helps

dbran

AckwelFoley

Thanks dbran..

I know this is a "how long is apiece of string" question, but typically is there a period of time it takes to go from receivership to the liquidators in a worst case senario, i believe there are procedures to be followed once in receivership and wouldnt that take more than 3 weeks?

dbran

Hi

If the directors decide that the company is insolvant and cannot pay its debts as they fall due it could happen this afternoon.

Kind Regards

dbran

AckwelFoley

dbran wrote: »

Hi

If the directors decide that the company is insolvant and cannot pay its debts as they fall due it could happen this afternoon.

Kind Regards

dbran

i dont know why i laughed when i read that.

Maybe its the brutal honesty!

smcgiff

Hi,

It'd be good to know whether it's a High Court appointed receiver or if it was a particular Creditor (Debenture Holder). It would be better if a High Court creditor as this would mean the receiver would be acting in the best interests of all creditors (which includes you).

As said above I wouldn't give them any more money this side of the reception.

Good luck!

AckwelFoley

Am i entitled to know who the receiver is and if it were court appointed or not?

Wile E. Coyote

Which hotel is it Snyper. I deal with a lot of hotels who have gone into Receivership but are continuing to trade as normal. I know it's very close to your wedding date but i wouldn't worry just yet. The receiver will generally trade for a few months and try sell the hotel as a going concern rather than close the doors straight away and let all the staff go..

Stabshauptmann

OP, from your point of view there is no difference between liquidation and receivership.

Money already given to the hotel is as good as gone, the hotel do not need to honour your booking.

However, any contract entered into now with the receiver will be guarenteed by the receiver iirc. So what you want to do it get the booking agreed in writing.

dbran wrote: »

Hi

Sorry to hear about your troubles. It is not great news.

There is a difference between a RECEVERSHIP and a LIQUIDATION. In the case of a receivership, the bank has basically said that it is taking control of the assets that its loan is secured on and is going to enforce the charge on those assets ie sell them so that they are paid.

Not necessarily, the receiver may simply recover the profits from the utilisation of the asset without selling it.

It does not technically mean that the company has to cease to trade although it invariably does result in this most times.

Or the company may be sold as a going concern to a new owner...

In the case of a liquidation the company has to cease trade immediately and be wound up.

A company can trade in liquidation - an orderly wind down, and can even be sold as a going concern.

Dont give them any more money unless they perform the service.

Money already paid to the hotel is unsecured, but money paid to the hotel now is guarenteed by the receiver iirc.

Stabshauptmann

snyper wrote: »

Am i entitled to know who the receiver is and if it were court appointed or not?

Yes. Companies trading as Receiverships, Liquidations and Examinerships must include this fact where ever their name appears, and notice that a creditors meeting is being held or a petition is before the court to appoint a liquidator must be given in two national newspapers.

For up to date news on appointments visit insolvencyjournal.ie

kennyb3

The posters above have done an excellent job of explaining what a receivership is so i dont have much more to add, but just in case someone does a search in future and comes across this thread (and sorry op this wont help you now) but can i strongly suggest wedding insurance given the climate we are in at present.

Im getting married myself next year and will be taking out a policy.

Wile E. Coyote

Stabshauptmann wrote: »

For up to date news on appointments visit insolvencyjournal.ie

It's the first website I check every day. The only thing with hotels is that they rarely trade under the Ltd company name but a bit of online digging should sort that out.

AckwelFoley

kennyb3 wrote: »

The posters above have done an excellent job of explaining what a receivership is so i dont have much more to add, but just in case someone does a search in future and comes across this thread (and sorry op this wont help you now) but can i strongly suggest wedding insurance given the climate we are in at present.

Im getting married myself next year and will be taking out a policy.

Didnt know there was such a thing as wedding insurance, mind you, you can get insurance for anything so i should have expected.

As a matter of interest what is the general cost of such a thing?



Does it cover you if you find out your wife is a demon in a few years?

smcgiff

Good advice there re getting the receiver to confirm the booking. Probably not likely though.

nicechick!

snyper wrote: »

Im getting married in 3 weeks. The hotel have rang us this morning and told us that they are gone into reveivership.

We have 3000 euros paid in already, The owners tell us that they will still be operating and that the wedding is fine

I am aware for the concept, but what exactly happens when a business goes into receivership?

Im in a serious panic now

You need to confirm your booking asap and get it in writing! Though I wouldn't worry about it to much but just in case the bank will not close any business as its more valuable to them open & in business its likely that this is a good viable business that is making money but owner couldn't honour debt and the hotel was secured against it. The banks will be delighted your wedding is taking place as its revenue/debt collection for them until the business is sold

djdeclan

Nicechick has pretty much hit the nail on the head.

I've a fair idea which hotel it is and if you haven't been told who the Receiver is pm me and i'll find out.

Receiver's over hotel assets will almost always be appointed by a secured creditor (High Court Receiverships are very rare) which will almost always be a bank. In a perverse way you are actually more secure in the hands of a Receiver than you were with the previous directors. The Receiver will almost always have to run the hotel in order to generate some income to cover running costs etc until he has the chance to sell. Keeping the hotel open will also maintain its goodwill which will increase the selling price. In terms of your deposit, while you are technically an unsecured creditor (same as the company who sells them their teabags etc) you should find that the Receiver will honour your deposit as your function is worth a considerable amount in terms of revenue.

If the Receiver refuses to honour the deposit you can tell him to either deduct a 3k 'discount' from the final price (therefore the wedding costs the same to you but technically he doesnt prefer an unsecured creditor) or threaten to take your business elsewhere and leave him with an empty hotel. I must say though that I can't see it coming to that at all. In fact the Receiver will probably appoint a hotel operator within the next day or so and that person will look after the running of the hotel so you won't have to deal with any of us nasty accountants.

The poster who commented that the directors could place the company in liquidation is incorrect for a number of reasons. A High Court judge wouldn't grant a winding up order if it was opposed by the Receiver and the directors no longer have locus to call a creditors meeting for a voluntary liquidation.

Hopefully that helps - enjoy your big day!