Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

618. To ask the Minister for Jobs, Enterprise and Innovation the qualifications that are necessary for a person to act as a receiver; the circumstances in which receivers are appointed and regulated; the information the borrower is entitled to; and if she will make a statement on the matter. [15510/16]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Receiverships arise as a result of private contractual relationships, normally between a company and a lending institution (the creditor). In the normal course, receivers are appointed on foot of a power contained in an instrument such as a debenture. It is thus a matter for the lender to determine the qualifications of the receiver when making the appointment. Section 433 of the Companies Act 2014 sets out the categories of persons who are disqualified to act as the receiver of a company e.g. an undischarged bankrupt; an employee or an officer of the company concerned or a person who was such within the period of 12 months before the date of the commencement of the receivership; and certain specified family members of an officer of the company concerned.

Receivership is a remedy that derives from the courts of equity. The relevant law in relation to receivership is largely made up of rules which the courts have developed by applying general contract law and equitable principles. Under the Companies Act 2014 a receiver has specific statutory duties under section 439 which provides that:

(i) receivers must achieve the best price reasonably obtainable at the time of sale; and

(ii) the receiver must not sell by private contract a non-cash asset of a company to a person who is or who, within three years prior to the date of appointment of the receiver, has been, an officer of the company unless the Receiver has given 14 days’ notice of his or her intention to do so to all creditors of the company who are known to him or her or who have been intimated to him or her.

These statutory duties make it imperative that the receiver obtains expert legal and valuation advice in relation to the sale of property, consistent with the duty “to obtain the best price reasonably obtainable”. Breach of a receiver’s statutory duties may result in the receiver being held personally liable for any loss incurred. Conferring statutory powers on receivers is intended to alleviate many of the problems which may arise from poorly drafted debentures. It should be noted that receivers also have a duty to provide certain information to the Registrar of Companies and the Office of the Director of Corporate Enforcement.