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17.RECEIVERSHIP :check: - Coggle Diagram
17.RECEIVERSHIP :check:
DEFINITION: an early method by which creditor such as mortgagee/ chargee could safeguard his / her equitable interest in the secured property (NOTE : co. is not wound up)
co. enter receivership when a receiver / a receiver and manager us appointed in respect of some of its property, either:
- pursuant to a term stipulated in the instrument creating the charge OR
- through the application of court
receiver (R)
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primary duty - to get in the specific asset subject to the charge and realize them for the benefit of the chargee
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NOTE :!!:
- mere receiver is not an officer of the co.
- only a receiver and manager is officer of the co. & he is appointed under the instrument (NOT BY THE COURT)
- receiver and manager APPOINTED BY THE COURT is not an officer of the company
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- APPOINTMENT OF A RECEIVER
contract
done where the co. defaults in observing one or more of its stated obligations inthe instrument / debentures.
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court
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creditor may do so when the security is in jeopardy(danger) with the burden of proof resting upon the applicant(secured creditor)
receiver or receiver and manager shall have the powers and authorities which are impliedly or expressly conferred by :
- the instrument / contract OR
- court's order AND
- subject to the contract / court order they may also exercise all powers set out in the 6th sch
3.DUTIES OF RECEIVER
primary duty : to get in property charged and ultimately disposed of for the purpose of the discharging the secured debt
obtain court order : must lodge notice to this effect with CCM within 7 days of the order/ appointment
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every biz document of co. must contain statement immediately following the name of the cosporation that such appointment has been made
- co. is required to send a statement of the affairs of the co. to the receiver
- upon receipt of the statement, the receiver must lodge a copy with CCM together with comments he consideer necessary
- a copy of comment must send to the trustee for debenture holder
- prepare acc. of the receipts and payments ( invoices / orders for biz ) and an estimate of the total value of property in respect of which he is was appointed receiver
- submit to ROC every 6 month during the course of receivership AND
- within 1 month after the receiver ceases to act
- R in distributing the proceed of the realization of the asset subject to the charge must be observe the order of priority as stipulated
- inter alia - requires when appointed R/RM , he has duty to pay certain preferential debts out of those asset in priority to the debenture holder secured by floating chargee
- in relation of sale of asset , R owes the same duties as a chargee to use his powers for the sole purpose of securing repayment of the moneys owing under the debenture and NOT for his own purpose
- act in good faith
- has duty to take reasonable care to obtain the true market value of the property at the time of sales
4.PRIORITY OF DEBTS
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R or RM is appointed over property secured by floating charge and where the co. is NOT in liquidation
- cost and remuneration of the R or RM
- amount which upon winding up is also payable in priority of unsecured debts (includes amount due salary, reimbursement, awards earned by employees for 4 month b4 appointment of R / RM )(limits the amount to max RM 15,000 / employee)
- portions deducted but not paid by co. - EPF / SOCSO within 12 months b4 appointment of R/RM
- federal tax (SST , CPGT )
- any debt that is payable pursuant to s392(4)CA, namely where the co. has contract of insurance, insured against liability to 3rd party
- balance paid to the chargee enforcing their charge in rececivership
criminal liability
civil liability
s393(3)CA2016
to contribute such sum to asset of co. as compensation in respect of misapplication m or breach of trust
to repay and restore the money / property / any part of money / property with interest at such reate that the court thinks fit
S381CA2016
liable to debts incurred by him in the course of receivership / possession (unless otherwise provided by the instrument appointing him as R/RM)
S382CA2016
personally liable for a contract entered into by him in the exercise of his powers (unless otherwise provided by the instrument appointing him as R / RM)
breach of duty - any continued offence after the conviction will be subjected to a further fine <RM500/day