WHAT HAPPENS when a receiver and a liquidator are appointed to the same company?

The authority of the receiver supersedes that of the liquidator, but the company remains both in receivership and in liquidation.

Such a scenario is not unusual for an insolvent company where a bank wants to protect the security backing its loan by appointing a receiver to seize a specific asset.

A liquidator was appointed by the High Court to three of Hugh O’Regan’s companies which were previously under court protection.

Anglo Irish Bank had already appointed a receiver to two companies, Thomas Read Holdings (TRH) and Clubko, which own two properties in Dublin city.

The receiver remains in place despite the appointment of a liquidator.

Irish Nationwide appointed a receiver yesterday to Dashaven, the firm behind the redevelopment of the Kilternan sports hotel in south Co Dublin.

The liquidator will have general interest in all of the companies’ assets. However, the receiver will take control of the assets over which the lenders have security. They will try to sell these assets in a bid to recover loans of €171 million in the case of Irish Nationwide on Kilternan and more than €20 million owing to Anglo on the two properties in Dublin city centre. Any proceeds remaining from the sale of these assets will go to the liquidator.

The appointment of a receiver and a liquidator would reduce the overall funds available generally to both secured bank creditors and unsecured trade creditors as receivers and liquidators are paid their fees in the first instance.