Question

Company Law

ILAC

Imaging Pty Ltd (Imaging) sells health care and consumer imaging products. Big Bank has a security interest over all of the business and assets of Imaging. Imaging has been struggling financially and has missed a loan repayment due to Big Bank. The loan agreement between Big Bank and Imaging provides that where there is a default in payment Big Bank is entitled to appoint a receiver. On 1 June 2019 Tim is appointed receiver of Imaging. Tim decides to sell the medical imaging assets. He lists the assets on Gumtree and takes the first offer. Tim decides that the medical imaging side of the business is not profitable and dismisses 15 employees. Advise Tim as to his rights and duties as receiver.

Answer 1

Receiver is an agent of the debtor company. He is required to act on the directions of mortgagee who appointed him. The receiver does not take directions from the company but rather he gives directions to the company.

Tim who is appointed as a receiver of Imaging Pty Ltd by Big Bank is responsible to take actions at the direction of Big Bank .

Rights of a Tim :

1. Give directions to the company ( Imaging Pty Ltd ).

2. To take actions to manage and release the assets of Imaging Pty Ltd.

Duties of a receiver :

1. Collecting debts due to the company and recovering the company owned properties.

2. Paying all the statutory dues ie. rates, duties and taxes

3. Creating or terminating leases of company property

4. Dealing with the litigations on comany's behalf

5. Selling the assets of the company

Tim who is appointed as a receiver of Imaging Pty Ltd by Big Bank is responsible to take actions at the direction of Big Bank .