Effect of administration order and winding-up order on LPA receivership and other receiverships — 2022
Produced in partnership with John Hughes of Shakespeare Martineau LLP
Last updated on 09/08/2022

The following Restructuring & Insolvency practice note produced in partnership with John Hughes of Shakespeare Martineau LLP provides comprehensive and up to date legal information covering:

  • Effect of administration order and winding-up order on LPA receivership and other receiverships
  • Effect of administration order on LPA receivership
  • Effect of winding-up order on LPA receiverships
  • Effect of administration order on other receiverships
  • Administrative Receiverships
  • Court appointed receivers
  • Effect of winding-up order on other receiverships

Effect of administration order and winding-up order on LPA receivership and other receiverships

Effect of administration order on LPA receivership

Where a company is in administration, any receiver of part of the company's property shall vacate office if the administrator requires him to. The case of Promontoria (Chestnut) Limited v Craig considered the basis on which administrators may require receivers to vacate office, for further details, see News Analysis: Administrators’ decision to remove receivers was unreasonable (Promontoria (Chestnut) Ltd v Craig and another).

The appointment of an administrator creates a moratorium. This will prevent a mortgagee from enforcing its security without the leave of the court or the consent of the administrator. For more information on the moratorium in administration, see Practice Notes: The moratorium in administration and Lifting the administration moratorium—appointment of fixed charge receiver.

Effect of winding-up order on LPA receiverships

Although the appointment of a liquidator does not terminate a receivership, it terminates the receiver’s entitlement to act as agent of the company and therefore exposes him to risk of personal liability.

A receiver can continue to deal with the assets charged by the mortgage in favour of the mortgagee which has appointed the receiver, but the receiver will be acting in his own capacity or as agent of the mortgagee. The terms of the mortgage should be checked to see if the mortgagee has delegated to

Related documents:
Key definition:
Administration order definition
What does Administration order mean?

A small scale alternative to bankruptcy or an individual voluntary arrangement whereby a debtor who is unable to pay a judgment that has been entered against him may apply for an order that the county court administer his estate.

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