The following Restructuring & Insolvency guidance note Produced in partnership with Amanda Eilledge of Hardwicke Chambers provides comprehensive and up to date legal information covering:
When a company or individual is in financial difficulties, a mortgagee will commonly seek to enforce their security by appointing a receiver where they are permitted to do so under the terms of the security document. This Practice Note considers the situation where the mortgagee is late to the table in enforcing security and the company that granted the security is already in administration or liquidation (or where it is an individual that has granted security, the individual is already subject to bankruptcy proceedings) by the time the mortgagee wishes to enforce its security and sell the charged property.
Prior to appointing a receiver, you should conduct the appropriate insolvency searches to confirm whether the company or individual mortgagor is subject to an insolvency proceeding. For further information, see Practice Notes: Winding-up and administration searches for companies at the Central Registry, What do insolvency searches at Companies House reveal?, What do insolvency searches at The Gazette reveal? and Bankruptcy searches.
Where a company is in administration no steps may be taken to enforce security over the company’s property except with the consent of the administrator, or with the permission of the court, (Insolvency Act 1986 (IA 1986), Sch B1, Para 43). For further details on the moratorium in administration, see The moratorium in administration and Lifting the administration
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