ADMINISTRATIVE RECEIVER Meaning and
Definition
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An administrative receiver is a term used in the realm of insolvency and finance, referring to an individual or a professional firm appointed by a secured creditor to take control of a company's assets and operations with the purpose of liquidating its assets to repay the debt owed. This appointment typically occurs when a company fails to meet its financial obligations and defaults on loan payments.
The appointment of an administrative receiver grants them extensive powers to manage and sell the company's assets, ensuring the secured creditor's interests are prioritized. The receiver's main responsibility is to recover the outstanding debt by selling off assets in a way that maximizes the creditor's recovery. They have the authority to make strategic decisions regarding the sale of assets, including negotiating contracts and dealing with any claims against the company.
Often, administrative receiverships are sought by secured creditors to protect their financial investment and maintain control over the repayment process. The receiver operates independently from the company's directors and shareholders, focusing solely on securing returns for the secured creditor.
Administrative receiverships are a specific type of insolvency procedure utilized in certain jurisdictions, including the United Kingdom. While similar to other forms of insolvency administration, such as administration or liquidation, an administrative receiver's appointment is typically triggered by a breach of a fixed or floating charge held by a secured creditor.
Etymology of ADMINISTRATIVE RECEIVER
The word "administrative receiver" is a term commonly used in the context of insolvency law. Its etymology can be broken down as follows:
1. Administrative: This comes from the Latin word "administrativus", which is derived from the verb "administrare", meaning "to manage" or "to administer". The word "administrative" refers to the act of controlling or organizing affairs, usually in a professional or official capacity.
2. Receiver: This word originated from the Old French term "recevre", which eventually evolved into the Middle English word "receiver". It refers to someone who is entrusted with receiving or collecting something, typically money or property.
When these two terms are combined, "administrative receiver" refers to an individual or office appointed by a court in insolvency proceedings to take control of and manage the assets and affairs of a company in financial distress.
