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Is it the case that companies are restricted to continue using any of the crystallised assets ?
And also ..who is the “receiver” appointed by the debentureholder or creditor (who has provided secured loan). What are the duties of that “receiver” ?
The effect of a fixed charge is that the borrower is not free to dispose of that asset
When a floating charge crystallises, the assets that are the subject of that charge are no longer available to be disposed of (collected / converted into cash) by the borrower
And such proceeds of disposal are payable to the erstwhile floating charge debenture holder
Who is a Receiver? A person appointed by the secured debenture holders upon the event of the crystallisation of the charge
Receiver’s duties? Basically, self explanatory! Assume responsibility for the sale / realisation of the assets that are the subject of the security, reimburse self for any expenses incurred in the realisation of those assets, pay out of the proceeds the receiver’s own fee and then pay the remainder to the secured debenture holders as repayment of their loan
OK?
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