Effect of bankruptcy or liquidation on the position of receiver as agent of the mortgagor
Produced in partnership with Amanda Eilledge of Hardwicke Chambers
Effect of bankruptcy or liquidation on the position of receiver as agent of the mortgagor

The following Restructuring & Insolvency guidance note Produced in partnership with Amanda Eilledge of Hardwicke Chambers provides comprehensive and up to date legal information covering:

  • Effect of bankruptcy or liquidation on the position of receiver as agent of the mortgagor
  • The agency relationship
  • How the agency relationship arises
  • Effect of liquidation of a company on the receiver’s position as agent of the mortgagor
  • Effect of company dissolution on the receiver’s position as agent of the mortgagor
  • Effect of bankruptcy of an individual mortgagor on the receiver’s position as agent of the mortgagor
  • The receiver as agent of the mortgagee (as opposed to agent of the mortgagor)
  • Effect of termination of the receiver’s status as agent of the mortgagor
  • HM Land Registry practice where the receiver’s position as agent of the mortgagor has terminated
  • Power of attorney

A receiver generally acts as agent of the mortgagor in collecting income from and disposing of the assets in respect of which the receiver has been appointed.

This Practice Note considers the effect of bankruptcy or liquidation on the position of the receiver as agent of the mortgagor and the effect of a receiver losing its position as agent of the mortgagor.

The status of the receiver will be important because it affects:

  1. the potential liability of both the receiver and the appointing mortgagee for acts done by or omitted to be done by the receiver; and

  2. how any documentation is structured, ie whether the receiver enters into an agreement as principal or agent of the mortgagor

Where the receiver cannot act as agent of the mortgagor, he will either be acting as principal or, less preferably from the point of view of the mortgagee, as agent of the mortgagee.

For an explanation of the different types of receivers, see Practice Note: Receivers appointed by statute, including LPA receivers.

The agency relationship

It should be noted that the receiver’s position as agent of the mortgagor is different from the usual bilateral principal/agent relationship because in the case of a receiver it involves a third party: the mortgagee. It is not the principal (the mortgagor) who appoints the agent (the receiver) but the mortgagee. The