RECEIVERSA lender with security, that is a mortgage over a property or other asset, has the right to appoint a receiver to that asset if the borrower is not repaying the debt or has breached some of its terms.

A receiver’s key duty is to protect the lender’s interests and to recover the debt, or as much of it as possible. They can sell the business or particular property, or continue to run the company. Receiverships can sometimes take months or years to complete.

EXAMINERSThis is a court-supervised rescue mechanism for companies that are insolvent but can demonstrate that they have a reasonable prospect of survival.

Examiners take over the business for up to three months, during which time they must come up with a rescue plan that at least a majority of one group of creditors are prepared to support. This often involves a reduction in the amount that will be repaid to creditors.

The court approves the plan once no creditor’s interest is unfairly prejudiced.

LIQUIDATORSA liquidator takes over a business, sells or disposes of the assets, distributes the proceeds to creditors according to their rank, secured, preferential and unsecured in that order, and then distributes what is left to shareholders.

However, in most insolvent liquidations, the lower ranked creditors tend to lose out, as there tends to be little left once secured creditors have been satisfied.

Companies do not have to be insolvent to be liquidated.

Profitable businesses can be liquidated to allow investors to cash in and collect their profits or for another reason, such as a group re-organisation.

ADMINISTRATORSUnder the Insurance Act, 1963, the Government appoints administrators to run insolvent insurance companies. Last year, Quinn became the third ever insurer to have an administrator appointed.

This should not be confused with a system available under British law that is also known as administratorship, but which has no equivalent in the Republic’s company law code.