A receiver is appointed by a party holding a floating charge over some or all of the company's assets.
It is important to distinguish between an administrative receiver and a receiver in Scotland. An administrative receiver may be appointed over all or substantially all of the property of the company over which a charge has been granted. Since the enactment of the Enterprise Act 2002, an administrative receiver may only be appointed in certain prescribed circumstances or where the floating charge which appoints them was granted before 15th September 2003. The practical effect of this is that administrative receivers may still subsist in Scotland for several years post-2003 until all pre-2003 charges are extinguished.
Separately, a receiver may still be appointed in light of the new provisions so long as the appointment is over property which is below the threshold which would be considered an administrative receivership.
The main responsibilities of a receiver are to attempt to realise the assets covered by the floating charge for the benefit of the creditor holding the charge. The receivers primary duty of care is towards the appointing creditor. Where there is anything left after all of the above has been carried out by the receiver, this must be remitted to the company. The Receiver is also obliged to submit a report to the floating charge holder and the company's creditors detailing the events leading up to his appointment, any disposals or proposed disposals by him of any property of the company and any carrying on or proposed carrying on by him of any business of the company. Furthermore, the report must detail the amounts due to the floating charge holder and any preferential creditor and also the amount of payment (if any) likely to be made to other creditors. The report, which is required under section 67 of the Insolvency Act 1986, must also provide a statement of affairs and make provision for unsecured creditors to be able to request a copy.
Legislative provisions for receivership in Scotland can be found in Part III of the 1986 Act.