Receivership – Hypothetical Question

Added on - 27 Jan 2020

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Receivership – HypotheticalQuestion
Table of ContentsINTRODUCTION...........................................................................................................................1Issue : Breach of duty by Garry as a receiver of ABC Computers Pty Ltd................................1CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4
INTRODUCTIONReceivership can be described as a form of management which is all about appointing areceiver who can take several steps in order to acquire the secured properties of an entity. Afterthat he or she has to sell out such property so as to pay off the secured debt of citedentity(Chappell, 2015). His duty starts at the beginning of the liquidation process of a companyor it can be said that receivers are those persons who initiates the process of liquidation.Receivers can be appointed through the statute as well as through private sector.Issue : Breach of duty by Garry as a receiver of ABC Computers Pty LtdA receiver who takes control over any property of an entity due to enforcement of anysecurity. They take possession of entity's properties and then they sale out such properties inorder to pay off the debts of cited entity(von Furstenberg, 2012). As secured creditors are to bepaid in preference to those who are unsecured.Liability of controllerA receiver acts as an authorised person who acts as an agent of the entity who work outthrough assisting it in payment of its debts. Receiver have to accomplish certain duties whichincludes :He has the duty to close unprofitable business entitiesHe requires to take crucial steps in order to maximize the value of the company.A receiver needs to secure the assets of company so that they can be protected againstaccidental situations.Realization of assets of an entity to pay off the liabilities of an entity.Management of financial transactions.Parties of ReceivershipThere are many parties who are involved in the process of receivership which are ; Thecreditor or court if appointed by the competent authority, liquidator and company(borrower).Appointment of ReceiverReceiver can be appointed through various process, as they can be appointed through thecourt or they can also be appointed through any creditor(Gianviti and et. al. 2010). The differentprocess of appointment are mentioned below :Appointment through court: There are very limited powers in the hands of court ascompetent authority give control to court for its appointment.1
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