October 2010
Part 2
Duties and powers of the official receiver as receiver and manager
24.8 Duty of the official receiver as receiver and manager
On the making of a bankruptcy order the official receiver is under a duty to act as receiver and manager until such time as the bankrupt’s estate vests in a trustee [Note 1]. The principal aim of the official receiver is to protect the bankrupt’s estate until a trustee is appointed [Note 2]. The legal powers of the official receiver when acting as receiver and manager are outlined below, whilst the practical application of these powers are explained in parts 3 to 10. In particular it should be noted that generally assets should only be realised where they are perishable or likely to decrease in value.
24.9 Powers of the official receiver as receiver and manager
The official receiver has the same powers as if he/she were a receiver or manager appointed by the High Court [Note 3].
24.10 Appointment of a receiver and manager by the High Court
The High Court may appoint a receiver or manager where it appears just and equitable to do so [Note 4], on the application to protect an interest in property for the benefit of those entitled to it. An appointment is made to:
24.11 The Beatles – appointment of High Court receiver and manager
The Beatles are an example of where the High Court appointed a receiver and manager. Each individual Beatle, together with Apple Corps Limited, entered into a formal partnership agreement. The partnership continued after the demise of the Beatles as a recording group in 1969. On 31 December 1970 Paul McCartney commenced legal proceedings in the High Court and a receiver and manager was appointed to act as a caretaker of the properties and interests of the partnership pending its dissolution.
24.12 Powers of a receiver and manager appointed by the High Court
The express powers of a receiver and manager are set out in the order appointing him, for example, allowing him/her to “collect, get in and receive” the property in question. The express power implicitly authorises acts incidental to, or consequential to, the carrying out of the object encompassed by the express powers. The receiver and manager has the power to insure property subject to his appointment against damage by fire and collect any rental income. He/she may also pay out small sums of money in respect of repairs or may allow such to a tenant. The receiver and manager does not have the power of sale of the property and/or chattels subject to his/her appointment or to borrow money without leave of the court.
Additional information on the powers of a receiver or manager appointed by the High Court are shown in Appendix C “The Powers and Duties of a Receiver” of Appendix 10 “A Guide for Receivers in the Chancery Division” of the Chancery Guide. The complete document can be viewed by clicking here and using the index to scroll down to Appendix C.
24.14 Additional powers of the official receiver as receiver and manager
In addition to having the same powers as a receiver and manager appointed by the High Court the official receiver is entitled to sell or otherwise dispose of any goods within the bankrupt’s estate that are perishable or likely to diminish in value [Note 5].
[Back to Part 1 - Appointment as receiver and manger] [Onto Part 3 - Initial actions on the making of a bankruptcy order]