|
As a firm of insolvency
professionals, the following is a list of some of the services we
provide to lenders:
AGENT
An appointment from a
lender pursuant to a security instrument such as a General Security
Agreement usually providing specific powers to liquidate assets of the
borrower covered by the security. There are no powers to manage the
business.
RECEIVER
Like an agency
appointment, a receiver is appointed by a lender pursuant to a
security agreement to liquidate assets of the borrower covered by the
security. Additional powers may be conferred upon the receiver, but
like an Agent, there are no powers to manage the business.
RECEIVER MANAGER
A receiver manager is
like an agent and/or a receiver with the additional powers of being
able to operate the business. The appointment is pursuant to a
security instrument which is sometimes blessed by the courts.
MONITOR
A lender on occasion
will appoint us as a monitor to provide independent information of a
borrower's operation, on a regular basis for a specific period of
time. The monitorship is an agreement between a lender and borrower
that sometimes evolves from a viability assessment mandated by the
lender. The appointment is generally not pursuant to terms of a
security agreement.
TRUSTEE
Powers and Duties of the Trustee
The
appointment of a trustee is the first and vital step in initiating the
principle of creditor control. The
trustee takes possession of the assets of the bankrupt debtor and of
all the books and documents relating to his affairs. He becomes in effect a temporary manager of the business,
subject to the supervision of the inspectors appointed by the
creditors. He may carry
on the business, or alternatively, sell the assets.
He
can do such things as employ a lawyer, borrow further money for the
business by pledging or mortgaging its remaining free (unsecured)
assets and negotiate with creditors for the acceptance by them of
specific assets in lieu of money settlement of their claims. He may even engage the bankrupt debtor himself to assist in
the administration of the bankrupt estate.
To do these things, however, he must have specific authority
from the inspectors.
A
trustee has the power and duty to recover property that under
bankruptcy law should form part of the debtor’s estate and thus be
available to satisfy the claims of creditors.
The
trustee distributes liquidating dividends (payments on account) to the creditors from
time to time as required by the inspectors and as realization of the
debtor’s assets permits. In
doing so he must, of course, be careful to take account of the claims
of the secured and preferred creditors.
|
