Receiverships can either be a privately appointed receivership using the creditor’s/lender’s debt instrument (usually a general security agreement or GSA) or a Court-Appointed Receivership. The decision to appoint a receiver is usually due to the lender’s concerns on regarding the its loans to the business or the status of its security.
Our Licensed Insolvency Trustees have acted as Receivers and Receiver-Managers through private appointments and Court appointments (under s. 243 of the BIA, or under another legislative provision). Only a person holding a licence to act as trustee may be appointed as Receiver or Receiver-Manager.
Before a Receivership appointment can take place, the lender must have sent prior notice to the debtor the statutory 10-day Notice of Intention to Enforce Security under the provisions of the Bankruptcy and Insolvency Act (“BIA”). This 10-day notice period is a requirement unless the insolvent person/company consents to earlier enforcement after the notice has been given. This time period allows for the debtor company to either remedy its defaults/indebtedness to the lender or consider filing a Notice of Intention to Make a Proposal to Creditors (“NOI”). The filing of a NOI would stay the secured creditor from enforcing its security for a 30-day period.
Should your company receive such a Notice of Intention to Enforce Security from your creditor(s), call our Licensed Insolvency Trustee at (604) 558-8020 to discuss your options.