Receivership

AAA

DEFINITION of 'Receivership'

A type of corporate bankruptcy in which a receiver is appointed by bankruptcy courts or creditors to run the company. The receiver may be appointed by a bankruptcy court, as a matter of private proceedings, or by a governing body. In most cases the receiver is given ultimate decision-making powers and has full discretion in deciding how the received assets will be managed.

INVESTOPEDIA EXPLAINS 'Receivership'

The primary responsibility of the receiver is to recoup as much of the unpaid loans as possible. Being in receivership is not an enviable situation for any company. Oftentimes, receivers find that the best way to pay back loans is to liquidate the company's assets, which effectively puts the company out of business, as its assets are sold at deep discounts in order to recoup some of the monies owed.

RELATED TERMS
  1. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  2. Receiver

    A person appointed by a bankruptcy court or secured creditor ...
  3. Bankruptcy Risk

    The possibility that a company will be unable to meet its debt ...
  4. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  5. Discharge In Bankruptcy

    A permanent order that releases the debtor from personal liability ...
  6. Estimated Recovery Value (ERV)

    The projected value of an asset that can be recovered in the ...
Related Articles
  1. Bonds & Fixed Income

    An Overview Of Corporate Bankruptcy

    If a company files for bankruptcy, stockholders have the most to lose. Find out why.
  2. Retirement

    The History Of The FDIC

    Find out why this corporation was developed and how it protects depositors from bank failure.
  3. Fundamental Analysis

    How accurate or important is the debt service coverage ratio (DSCR) in evaluating whether to invest ...

    See how investors can use the debt service coverage ratio to evaluate the solvency of a company before making an investment decision.
  4. Fundamental Analysis

    What is the difference between the debt ratio of a company and the debt ratio of an individual?

    Discover the different financial evaluation measures that are most commonly applied to individuals and corporations, respectively.
  5. Investing

    What are Operating Expenses?

    An operating expense is any expenditure made for the purpose of operating a business. These expenses are the day-to-day costs that help keep the business going. Operating expenses are reflected ...
  6. Investing

    What's Overhead?

    Overhead is an accounting term used for expenses that have to be paid even if the business doesn’t earn any revenue. The business would not be able to operate without paying its overhead expenses, ...
  7. Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...
  8. Credit & Loans

    What's the difference between a credit bureau and a credit rating agency?

    Learn the differences between credit bureaus that report on individuals' creditworthiness and credit rating agencies that rate corporate or government debt.
  9. Bonds & Fixed Income

    Does a good credit rating guarantee repayment?

    Learn how credit ratings help investors determine the creditworthiness of an issuer and the risk associated with making an investment in the issuer's debt.
  10. Entrepreneurship

    Alternatives To Business Bankruptcy

    Bankruptcy isn't the only alternative for a struggling business. It can try negotiating with creditors or liquidating assets outside the U.S courts.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center