March 2001
69.29 Power to sell or appoint receiver in event of bankruptcy
Where the statutory or express powers for a mortgagee, either to sell or to appoint a receiver, are exercisable by reason of the mortgagor being adjudged bankrupt, such power shall not be exercised only on account of the bankruptcy without leave of the court.
Notes: [LPA s110]
The bankruptcy or liquidation of the mortgagor does not determine the receivership but terminates the agency of the receiver who, in the absence of directions from the mortgagee, becomes personally liable in respect of any agreement that he makes after a bankruptcy order or winding-up order is made (see paragraph 69.12).
69.31 Action by official receiver
(amended August 2012)
As soon as the official receiver becomes aware of the appointment of a receiver, he should immediately contact him to inform him of the liquidation or bankruptcy and to ascertain whether the receiver is still acting. Reference should be made to paragraphs 3.18(c), 3.26 and 3.27 of this manual for details of the other initial enquiries that should be made where the receiver was appointed by a chargeholder.
Following receipt of the instrument creating the charge and the document appointing the receiver, the official receiver should consider their contents in the light of Chapter 9 of the Technical Manual (see paragraphs 9.6 and 9.7). The official receiver should ensure that the charge was registered under section 26 of the Land Registration Act 1925 as well as under the Companies Act 2006 (see also paragraph 9.11). The official receiver should also ensure that the chargeholder has become entitled to exercise his powers of sale of the property.
If a receiver has been appointed invalidly, because of a defect in his appointment or a defect in the security, he is a trespasser in law and both he and his appointor may be liable in damages.
69.32 Where no receiver appointed
Where no appointment has been made by the chargeholder prior to the winding-up order, the official receiver should make immediate enquiries to ascertain whether it is the intention of the chargeholder to appoint a receiver. If a chargeholder refuses to take steps to realise his security or to appoint a receiver to do this on his behalf, the official receiver should consider making an application to the Secretary of State for the appointment of an insolvency practitioner as liquidator. The official receiver should ensure that the chargeholder is informed in writing of the action that he proposes to take.
69.33 Disclaimer of onerous property
Where a receiver is managing leasehold property that vests in the official receiver as trustee of the bankrupt’s estate, the official receiver, as trustee, may wish to consider disclaiming the property as there may be liabilities attached to the lease. Disclaimers are discussed in Chapter 34 of this manual.
The official receiver should not apply for early dissolution of the company in cases where a receiver is in office. The routine dissolution of the company should also be deferred - see Chapter 38 of this manual, paragraphs 20 to 27.
[Back to Part 4 - The Receiver's Duties] [On to Part 6 - Charges Generally]