Court Appointed Receiver vs. Privately Appointed ReceiverSo.....
What is a Court Appointed vs. Private Receiver?
A Court Appointed Receiver is appointed pursuant to section 1323 of the Corporations Act. The primary role of a Court Appointed Receiver depends on the specific Order made by the Court.
This form of appointment is not as common as a private appointment. It is normal for such an appointment to be made where the Court sees that it is desirable to protect the interests of creditors and shareholders and to preserve the assets of the company until specific matters are resolved by the Court. Insolvency is not a pre-requisite to this type of appointment and more often arises as a result of a partners’ or shareholders’ dispute. Upon the appointment of a receiver by the Court the powers of the directors to administer a company are suspended and they will be excluded from the management of the company.
Who appoints a Receiver and how is it done?
The appointment of a Receiver is made either privately, usually by a bank, or by the Court. Private appointments are by far the most common. They are made either under the powers contained in a Mortgage document, Debenture Deed or under powers in Real Property legislation.
The powers of a receiver are set out in the document that allowed the appointment of the receiver. However, the receiver also has additional powers under section 420 of the Corporations Act. The receiver’s main role is to take possession of assets and to manage and realise the assets for the benefit of the secured creditor. The receiver must ensure that all care is taken to sell the property for its market value or the best price that is reasonably attainable.
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So it would seem that because Receivership was appointed by the Courts that it was not initiated by the Banks or they likely would have assigned a Private Receiver.
And so that begs the question as to why would the YTG petition the Courts to put VG into Receivership when they already have access to the $104 million bond? You'd think the bond company would have filed the petition if anybody in order to recover their $104 million.
Is YTG trying to go after more of VG's assets than the $104 million bond and how is this all going to unfold for the bond issuer, the banks, etc? I would think the secured lenders like the banks and many other debters would be first in line before YTG. So was YTG's move to petition the courts for appointment of a Receiver more about getting VG management out quickly to satisfy the FNs demands and they needed to use the Court Appointed Receivership path to accomplish that? I can't see the Receiver doling out money to the YTG for remediation work when that's what the bond is for.
And why didn't the banks and financers assign a Private Receiver way before YTGs move if they were certain the company couldn't survive this? And now that a Court Appointed Receiver has been appointed, can the banks still appoint their own private Receiver? It seems strange that the court was so quick to appoint a Receiver without input from the major financers and debtors who would seem to have not been in a hurry to put the company into Receivership. Probably waiting for the 3rd party investigation results before making their decision whether or not to appoint a Private Receiver.
No doubt this court appointed Receiver move will stir up the financers who will be now all be looking to ensure they get their piece of the pie. Not sure the banks will be happy getting back pennies on the dollar though a court appointed Receiver so this should get interesting when the PWC Receiver tries to liquidate VG's assets.
My opinion only.
HB77