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ARTICLE · 07 JULY 2023

Corporate Receiverships

KI Legal
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When a corporate borrower defaults on its debt obligations, a secured creditor may exercise a variety of remedies to enforce its interest.

United StatesInsolvency/Bankruptcy/Re-Structuring
Kyriaki Christodoulou
Kyriaki Christodoulou
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When a corporate borrower defaults on its debt obligations, a secured creditor may exercise a variety of remedies to enforce its interest. Receiverships are one such remedy whereby a secured creditor may seek the appointment of a court empowered impartial party to receive, preserve, or liquidate collateral. Receivers are appointed to take possession, manage, collect, and preserve a property, business, rents, or other assets that are in dispute.

There are numerous types of receiverships, including –

  • Specific or special receiverships – which are appointed over certain assets and typically sought by secured creditors seeking to protect their collateral.
  • General receiverships – which are appointed over all of a debtor's property, which displaces the debtor's ability to control it.

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