The maximum amount which a receivables financier is prepared to advance against the value of receivables at any time, being the advance percentage of the value of approved receivables subject to reserves and the facility limit.

A financier who provides specialised funding by purchasing/financing receivables.

Generic description for a receivables purchaser or financier lending against the security of a receivable.

Every financing facility is predicated on the solvency of the borrower and its ability to discharge its financial obligations under the facility. A receivables financing facility is no different. Before committing to fund a client’s receivables, the financier should: • evaluate the potential impact of a client encountering financial difficulties • obtain a security package that will maximise the financier’s chance of recovery on the client’s insolvency, and • have a clear exit strategy This Practice Note explains: • the security that a receivables financier should look to take to protect itself in the event of its client’s insolvency • the statutory ranking of an insolvent client’s creditors • the financier’s ability to appoint an administrator (often the preferred option if a client becomes insolvent) • the potential challenges to a financier’s security by an insolvency practitioner appointed in respect of an insolvent client’s assets, and • the impact of insolvency set-off on a receivables financier Security The security sought by a financier in a receivables finance transaction will differ depending on

An agreement pursuant to which the financing of receivables is structured as a sale and purchase of the receivables.

Invoice discounting and factoring are established forms of receivables finance in the UK. Introduction to receivables purchase transactions Invoice discounting and factoring are types of receivables purchase transactions whereby a supplier of goods and/or services (frequently referred to as the seller or the supplier) sells (typically by way of assignment) the receivables owing to it by the buyer of such goods and/or services (frequently referred to as the buyer or the account debtor), often with all related rights. Such receivables purchase transactions are frequently made at a discounted purchase price. However, it is also possible to purchase receivables for a purchase price equal to their face value with the supplier paying a purchase fee to the purchaser. There are a number of reasons why suppliers may prefer to elect to sell receivables (on a no recourse or limited recourse basis) instead of borrowing. These reasons can include: • pricing—if the account debtor is a better credit risk than the supplier, the supplier might receive better pricing terms than if it were to borrow

In relation to real property there are two relevant types of receiver: a receiver appointed by the holder of a fixed charge and an administrative receiver. An administrative receiver is appointed by the holder of a floating charge and has extensive powers to manage the company over which it is appointed. In relation to a floating charge granted after 15 September 2003, the right to appoint an administrative received has been severely curtailed. Fixed charge receivers, also known as LPA receivers, have more limited powers in relation to the asset charged only.

This Practice Note is concerned with receivers appointed pursuant to the Law of Property Act 1925 (LPA 1925) or an express power in a charge (for ease both are referred to in this Practice Note as LPA receivers, or receivers). This Practice Note does not cover administrative receivers or court appointed receivers. VAT issues for receivers A receiver is primarily concerned with the collection and application of money received by them in the course of their appointment. The factual situation can be relatively simple or complex depending on the type of property over which the receiver is appointed, the powers granted under the mortgage deed under which the receiver is appointed, and what action the receiver needs to take in order to maximise the return to the appointing mortgagee. A receiver generally has control over the property in respect of which they are appointed, but not of the wider business of the mortgagor (even though the property may comprise the majority of that business). A receiver generally acts as agent of the mortgagor (unless

Receivers—background Receivers have been recognised in English law as a remedy available to creditors and others wishing to protect their interest in assets since the 15th Century. Vice Chancellor Griffiths stated in a case reported in 1868 that the appointment of a receiver was 'one of the oldest remedies in this land'. Law of Property Act 1925 (LPA Receivers) The Law of Property Act 1925 (LPA 1925) contains the ability for a mortgagee to appoint a receiver. The right to appoint a receiver under LPA 1925 arises when the mortgage monies become due. A receiver is a person appointed by a mortgagee or by the court whose role is to collect income from and protect property over which they have been appointed. A mortgagee would appoint a receiver to collect rent or other income from the mortgaged property and/or to manage the property generally, for example to deal with the management and maintenance of the property. A mortgagee would appoint a receiver if it felt that a receiver with

Debts are provable in bankruptcy whether they are liquidated or unliquidated. The key question is usually whether the debts are provable in the bankruptcy. What constitutes a provable debt in administration, winding-up and bankruptcy is set out in the Insolvency (England and Wales) Rules (IR 2016), SI 2016/1024, r 14.2(1). ‘All claims by creditors except as provided in this rule, are provable as debts against the company or bankrupt, whether they are present or future, certain or contingent, ascertained or sounding only in damages.’ Section 382 of the Insolvency Act 1986 defines bankruptcy debts to include: • (a) any debt or liability to which [the bankrupt] is subject at the commencement of the bankruptcy • (b) any debt

A company in administrative receivership, under the control of a receiver for the benefit of one main appointing creditor.

The High Court has a general power to appoint a receiver by virtue of section 37 of the Senior Courts Act 1981 (SCA 1981). SCA 1981, s 37(6) provides for the provisions of SCA 1981, s 37 to apply to the Family Court as they apply to the High Court (see also sections 31E and 31J of the Matrimonial and Family Proceedings Act 1984 as to the powers of the Family Court). In relation to the County Court, see section 107 of the County Courts Act 1984. Receivership may be considered where the nature of the debtor's assets is such that equitable execution is appropriate (see: Relevant assets and equitable execution), or for the purpose of preserving property during litigation. The main functions of a receiver are: • to collect the rents, profits or other monies receivable in respect of the judgment debtor's interest in a specified property, and • to pay them: ◦ into court, or ◦ to the judgment creditor Receivership is an uncommon method of enforcement. It was described by Mostyn J in Maughan