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Quite
often a banker (or other person or organisation) takes out
a written agreement with the company. That agreement is sometimes
called a "debenture" and other times a "fixed
and floating charge".
Under the floating charge it had always
been possible for the floating charge holder to appoint an
administrative receiver, in specified circumstances.
The receiver so appointed acted only
for the bank and his aim was to recover the monies due to
the bank. The receiver has very little in the way of duties
to other creditors.
The 15th September 2003 is a cut off
date as to whether or not a bank or other floating charge
holder can appoint an administrative receiver.
The rules provided by the Enterprise
Act 2002 are that:
- If the debenture was registered
prior to the 15th September 2003 the bank may appoint their
own receiver.
- For debentures registered after
the 15th September 2003 the banks power to appoint an administrative
receiver is removed. (Banks holding post 15th September
2003 debentures will therefore resort to appointing "administrators"
as opposed to "administrative receivers" when
they see their security to be at risk.)
The main distinction between an
administrator and an administrative receiver is that an administrator
acts on behalf of the general body of creditors - not just
the bank!
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