receivers and other companies

Lantus

I live in a housing estate and the builders have gone into receivership. The director of the company is also a director of our management company for the estate (a totally seperate entity)

We understand that the receivers are now 'acting as directors' for our management company (probably to faciltate any sale of assets on the estate.) Can a receiver do this? Effectively run another company just because the director of the company they are dealing with was a director here too? (he has resigned) The managment company is not in receivership and is a not for profit vehicle to manage the estate.

Doesn't seem right. I have read as much as I can and receivers powers seem to be limited to the company they are charged with and nothing more than that. Can anyone offer clarity?

Lantus

Lantus wrote: »

I live in a housing estate and the builders have gone into receivership. The director of the company is also a director of our management company for the estate (a totally seperate entity)

We understand that the receivers are now 'acting as directors' for our management company (probably to faciltate any sale of assets on the estate.) Can a receiver do this? Effectively run another company just because the director of the company they are dealing with was a director here too? (he has resigned) The managment company is not in receivership and is a not for profit vehicle to manage the estate.

Doesn't seem right. I have read as much as I can and receivers powers seem to be limited to the company they are charged with and nothing more than that. Can anyone offer clarity?

Who owns the Management Company?

Paulw

Deleted User wrote: »

Who owns the Management Company?

No one owns a management company.

The unit owners are all members of the management company.

The OP should ensure that at the next AGM that the sitting directors resign and unit owners are elected as directors.

Paulw

Paulw wrote: »

No one owns a management company.

The unit owners are all members of the management company.

The OP should ensure that at the next AGM that the sitting directors resign and unit owners are elected as directors.

Actually that's not true at all. For a start the members technically own the OMC and also the developer may have maintained some control over the OMC and therefore the Receiver is going in to take control of it. Likely all the units have not been sold yet if this is the case.

Lantus

Deleted User wrote: »

Actually that's not true at all. For a start the members technically own the OMC and also the developer may have maintained some control over the OMC and therefore the Receiver is going in to take control of it. Likely all the units have not been sold yet if this is the case.

good point. there are several commercial units which have not sold which the builder would technically still own and the receivers are running until they sell them.

However, the sale of these is nothing to do with the management company. The managment company doesn't own them.

So why would the receiver take control of the management company?

I have requested an AGM as the directors held one in 2010 so it's well overdue.

Victor

Lantus wrote: »

So why would the receiver take control of the management company?

Are you sure he has?

The residents / unit owners would do well to take independent legal advice, and probably seek an AGM to appoint new directors.

subway

my understanding is that the builder, in most cases, stayed on the mgmt company as long as there were unsld units. if he had a majority, he could basically veto any improvements to the estate that would increase his portion of the management fee.
hence creeping management fees after builders sell off the remaining units. (not happening these days)

if the company is the owner, which is most definitely the case as the builder would not be stupid enough to have hundreds of units in his own name, then they are the majority member of your management company.

we talk about membership, but what we really mean is shareholder. each owner has a 1 share stake in the management company. therefore the builders company has lots of shares. as the receiver is now in control of the assets of the company, it stands to reason that he is also the majority shareholder of your mgmt company.

was the builder the director or just majority shreaholder

i would also echo the EGM with legal advice sentiment above

Lantus

subway wrote: »

my understanding is that the builder, in most cases, stayed on the mgmt company as long as there were unsld units. if he had a majority, he could basically veto any improvements to the estate that would increase his portion of the management fee.
hence creeping management fees after builders sell off the remaining units. (not happening these days)

if the company is the owner, which is most definitely the case as the builder would not be stupid enough to have hundreds of units in his own name, then they are the majority member of your management company.

we talk about membership, but what we really mean is shareholder. each owner has a 1 share stake in the management company. therefore the builders company has lots of shares. as the receiver is now in control of the assets of the company, it stands to reason that he is also the majority shareholder of your mgmt company.

was the builder the director or just majority shreaholder

i would also echo the EGM with legal advice sentiment above

very interesting point that the OMC might own the commercial units if they are unsold? I will attempt to see if that is the case. We had always understood that the builder owned them. I dont think they ever expected to be left with any. (All the residential units have sold and the estate is full bty.) There are roughly 200 residential properties and about 15 commercial units unsold so I dont believe the builder would have a majority share in this case.

The builder has and still holds director positions.

So if the OMC doesn't own the commercial units then I'm guessing they have no basis to run the OMC.

If the omc DOES own the units then they would do. (I am doubtful as we contacted them a while back an they were unaware of the management company even though they had been appointed as receivers some time ago.)

subway

then it sounds like the developer voted himself in as director when he was in the majority and no one ever voted him out.
have you ever attended an AGM, or have the unit-owners organised one?

you guys ARE the management company so its in your interest to do this and then get the best deal for running your estate and buildings rather than just paying whatever rates the current management agent charges without negotiation.

in this situation, it seems the builder is still the elected director, but has no rights to that as he is not a shareholder. the receiver cant take on that position without being voted in. if it was in their interest they would organise an EGM, but i doubt they give 2 hoots tbh. they may own a few shares via the commercial units as they are part of the block and liable for fees and bldgs insurance etc.

your next action here is find out who is on the board of your management company and start a petition for an EGM. your contracts will have details of how to call an EGM, who can call one and what conditions need to be met.
you should start reading contract and get up to speed on what you need to do, then contact your neighbours and start informing them via a leaflet drop or holding an information evening / get together.
once you meet the conditions for an EGM, officially petitition for one and vote in a new board.

Lantus

subway wrote: »

then it sounds like the developer voted himself in as director when he was in the majority and no one ever voted him out.
have you ever attended an AGM, or have the unit-owners organised one?

you guys ARE the management company so its in your interest to do this and then get the best deal for running your estate and buildings rather than just paying whatever rates the current management agent charges without negotiation.

in this situation, it seems the builder is still the elected director, but has no rights to that as he is not a shareholder. the receiver cant take on that position without being voted in. if it was in their interest they would organise an EGM, but i doubt they give 2 hoots tbh. they may own a few shares via the commercial units as they are part of the block and liable for fees and bldgs insurance etc.

your next action here is find out who is on the board of your management company and start a petition for an EGM. your contracts will have details of how to call an EGM, who can call one and what conditions need to be met.
you should start reading contract and get up to speed on what you need to do, then contact your neighbours and start informing them via a leaflet drop or holding an information evening / get together.
once you meet the conditions for an EGM, officially petitition for one and vote in a new board.

cheers for advice. As I understand it a director can appoint anyone else as a director (even a non shareholder subject to the articles of association so in theory he could appoint the receiver as a director outside an AGM or EGM at any time.) Although I would find it highly unusual that they would want to accept given that the OMC has no assets and carries a range of duties that the receiver would have no interest in at all.

subway

i dont know for sure, but that sounds correct. i think the director would need to inform the shareholders of such a change.
however, i would alos agree that the received would not be interested in doing this, as it has nothing to do with managing the assets of the company. its likely that the developer is still appointed as director, or maybe has put his cat in charge, so call a meeting and vote him out in his absence.