0800 644 6080
Call FREE from Landline and Mobile
Est. 1989

Explaining the rules surrounding LPA Receivership

Affected by Covid-19? Immediate Rescue Or Closure Options Available

FAST Free Director Advice & Support, With 77 offices Nationwide our Licensed Insolvency Practitioners can Help Today.

Updated: 5th February 2020

RBR Video - Administrative Receivership and LPA

The processes and intricacies involved in Administrative Receivership and LPA oversight can be difficult for company directors to fully understand and get to grips with. Click the video below for a detailed overview.  

 

Video Transcription

Administrative receivership is a process initiated by a secured creditor who has lost faith in a company's ability to repay the sums owed. Administrative receivers are appointed with a view to selling assets of the company in order to repay the sums owed to the secured creditor.

There are some similarities between administrative receivership and administration –however, administrations are more common now as a secured creditor is generally only able to appoint an administrative receiver in circumstances where they are holding security – most commonly a debenture – that was granted before the 15th September 2003.

Whether or not you'll be able to keep avoid company from entering administrative receivership will depend on how far along in the process you are, and how soon you take action after becoming aware that the secured creditor is contemplating making such an appointment. If the company has already breached the terms of its banking or loan facilities, it is highly advised to contact us as soon as possible to discuss the options which may be available.

A receiver appointed specifically under a fixed charge generally has more limited powers as they can only deal with the fixed charge property and not the business generally. A fixed charge receiver may also be referred to as an LPA receiver where a receiver is appointed under the Law of Property Act 1925 to take back control of the property where the borrower has defaulted on the terms of its loan.

LPA receivership is not a formal insolvency procedure and so should not be confused with administrative receivership. While LPA receivers are commonly appointed where the borrower has failed to repay a loan, it can also occur where there have been other breaches of the loan, for example, a breach of the loan-to-value covenant. The fixed charge receiver is usually given extensive powers to run the business at the property and to divert the business income to the lender. 

For more information on administrative receivership and LPA receivership and the options that are available to you and your company, you can arrange a free consultation at one of our regional offices and seek confidential advice from an insolvency practitioner.

Director Support - Business suffering from Cash-Flow Problems?
If your company is financially distressed, we also offer the below services:
Business debt recovery

  • Recover Unpaid Invoices of £5k+
  • Expert Credit Control Services
  • Stop Late Payers & Bad Debts
Visit Site
Time to pay experts

  • Get Breathing Space with HMRC
  • Support with Business Tax Arrears
  • 35 Years HMRC Negotiation
Visit Site
UK Business Finance

  • Rejected for a CBILS Loan?
  • Get Emergency Business Funding
  • Supporting 1000+ UK Companies
Visit Site
Who we help
  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships