Liquidator vs. Receiver - difference ?

Delancey

It's my understanding that a Liquidators role is to dispose of the assets of a company and recover monies owed to it and then pay these funds out to the various creditors according to their status as secured or unsecured creditors - correct ?

What I don't really understand is what a receiver does/is , it seems to me that receivers do work very similar to a liquidator , just what are the differences ?

Are the above positions only open to Accountants or can Solicitors fulfil these roles also ?

crystalmice

Delancey wrote: »

It's my understanding that a Liquidators role is to dispose of the assets of a company and recover monies owed to it and then pay these funds out to the various creditors according to their status as secured or unsecured creditors - correct ?

What I don't really understand is what a receiver does/is , it seems to me that receivers do work very similar to a liquidator , just what are the differences ?

Are the above positions only open to Accountants or can Solicitors fulfil these roles also ?

Liquidators are usual court appointed and will dissolve the company in whatever way will make the most money for all the creditors of the company. Receivers are appointed on behalf of a bank, and will only act to recover money for the bank, even if that course if action will disadvantage other creditors. There are plenty of other differences too but that's the most important thing

Delancey

So once the bank have got their money the Receivers job is done and the company can ( thoretically at least ) resume business as usual ?

Delancey

Delancey wrote: »

So once the bank have got their money the Receivers job is done and the company can ( thoretically at least ) resume business as usual ?

In theory yes but in practice the debenture holder usually has a call over the majority or all of the assets and therefore there is nothing left to do but liquidate.

There is also a situation where you have what in England is called an Administrative Receiver, here they are often called Manager Receivers, who take over the entire business and can continue to run it in order to satisfy their debt or, alternately, can sell the entire business a la SuperQuinn.

Carawaystick

Isn't a receiver usually appointed when the assets exceed the debt, where a liquidator is appointed when the debts exceed the assets

Carawaystick

Carawaystick wrote: »

Isn't a receiver usually appointed when the assets exceed the debt, where a liquidator is appointed when the debts exceed the assets

In short no. Both can be appointed in both situations and, actually, can be appointed simultaneously.

Delancey

Deleted User wrote: »

In short no. Both can be appointed in both situations and, actually, can be appointed simultaneously.

Do you mean 2 different people - one a Liquidator and the other a Receiver in the same company simultaneously ? Sounds like a recipe for chaos........

Delancey

Delancey wrote: »

Deleted User wrote: »

In short no. Both can be appointed in both situations and, actually, can be appointed simultaneously.

Do you mean 2 different people - one a Liquidator and the other a Receiver in the same company simultaneously ? Sounds like a recipe for chaos........

Thats precisely what I mean. Receiver deals with the assets he has control over and the liquidator deals with the remainder as well as dealing with the legal requirements for the orderly winding up of the company.