A receiver can be appointed in one of two ways: Privately by a secured creditor, or by a Court Order. The BIA provides for the enforcement of security and permits the court appointment of a receiver.
A secured creditor may want to enforce its security on all or some of the assets of a debtor.
They must give prior notice and wait 10 days before proceeding.
If a receiver is appointed, they must give notices to all the creditors involved, regularly issue reports on the status of the receivership, and prepare a final report/statement of all receivership accounts.
A privately appointed receiver can carry on the business of the debtor or sell their assets through an auction or private sale, in accordance with their security documentation. However, a court-appointed receiver is an officer of the court. They have the responsibility to protect the interest of any stakeholders related to the debtor’s corporation.