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Receivership and Insolvency: When Things Go Bad
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Date: May 29 2007 |
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Recognizing the early warning signs that a company is in financial trouble is key to rehabilitating the business and to ensuring that creditors are in the best position to fully recover the debt owed to them by the company. The earlier in the cycle of business failure that professional assistance is sought, the more options will be available to try to turn around the business or at least maximize the value on a sale as a going concern. One tool available to assist secured creditors is the appointment of a receiver. This paper outlines the role and powers of receivers as well as the impact of a receivership on the powers of the company’s directors. This paper also outlines areas of particular interest in receiverships and insolvency proceedings including the unique circumstances of dealing with intellectual property and some evolving issues such as the potential shifting of duties of directors and officers when a company is insolvent or nearing insolvency.
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