Appointing a receiver over assets on an insolvent trustee company – Some practical observations

We recently acted for a liquidator of an insolvent SME trustee company.

The trust deed automatically disqualified the company from being the trustee on its liquidation. Unsurprisingly, no third party stepped up to be appointed the new trustee of an insolvent trust, via the trust deed appointment provisions.

Acting cautiously under the current law, for the liquidator to gain control and the power of sale over the trust assets, he had to apply to the Court to seek his appointment as the court appointed receiver of the trust's assets. The immediate issue this raised, was whether there would be sufficient trust assets to fund such a receivership.

Thankfully, the Federal Court, via the docket Judge system, was efficient in dealing with the receivership process, from the appointment through to the receiver's discharge.