A receiver is appointed by a secured creditor and is instructed to take control of and realize on the assets that are subject to the secured creditor's security. A secured creditor is required to file a Notice of Intention to Enforce Security which provides the debtor with 10 days notice of the secured creditor's intention to appoint a receiver. After the expiry of the 10 day notice period, the secured creditor may take whatever steps the security agreement allows to recover the loan. To delay the realization by the secured creditor in an attempt to restructure and/or negotiate a settlement, you must contact a Trustee as early as possible after receiving the notice so that the various alternatives can be reviewed and considered in a timely fashion.
Once a company is placed into receivership, the receiver's job of liquidating the assets may
provide an opportunity for the former owner of a business, with or without new financial
backing, to acquire the assets for their liquidation value and set up a new company to operate the
business in the future. There are many technical matters that must be dealt with in such a
scenario. These will likely require professional advice from legal and accounting advisors in
addition to the Trustee.
