Receiver’s Duties
Companies Act
Power of receiver and certain others to apply to court for directions and receiver’s liability on contracts
438. (1) Where a receiver of the property of a company is appointed under the powers contained in any instrument, any of the following persons may apply to the court for directions in relation to any matter in connection with the performance or otherwise, by the receiver, of his or her functions, that is to say:
(a) (i) the receiver;
(ii) an officer of the company;
(iii) a member of the company;
(iv) employees of the company comprising at least half in number of the persons employed in a permanent capacity by the company;
(v) a creditor of the company;
and
(b) (i) a liquidator;
(ii) a contributory;
and, on any such application, the court may give such directions, or make such order declaring the rights of persons before the court or otherwise, as the court thinks just.
(2) An application to the court under subsection (1), except an application under that subsection by the receiver, shall be supported by such evidence that the applicant is being unfairly prejudiced by any actual or proposed act or omission of the receiver as the court may require.
(3) For the purposes of subsection (1), “creditor” means one or more creditors to whom the company is indebted by more, in aggregate, than €13,000.
(4) A receiver of the property of a company shall be personally liable on any contract entered into by him or her in the performance of his or her functions (whether such contract is entered into by the receiver in the name of such company or in his or her own name as receiver or otherwise) unless the contract provides that he or she is not to be personally liable on such contract.
(5) In those circumstances, the receiver shall be entitled in respect of that liability to indemnity out of the assets of the company; but nothing in subsection (4) or this subsection shall be taken as—
(a) limiting any right to indemnity which the receiver would have apart from this subsection, or
(b) limiting the receiver’s liability on contracts entered into without authority or as conferring any right to indemnity in respect of that liability.
(6) Subsection (7) applies where a receiver of the property of a company has been appointed or purported to be appointed and it is subsequently discovered that the charge or purported charge in respect of which he or she was so appointed or purported to be appointed was not effective as a charge on such property or on some part of such property.
(7) Where this subsection applies, the court may, if it thinks fit, on the application of the receiver referred to in subsection (6), order that he or she be relieved wholly, or to such extent as the court shall think fit, from personal liability in respect of anything done or omitted by him or her in relation to any property purporting to be comprised in the charge by virtue of which he or she was appointed or purported to be appointed which, if such property had been effectively included in such charge or purported charge, would have been properly done or omitted by him or her and he or she shall be relieved from personal liability accordingly.
(8) In the event of such an order being made, the person by whom such receiver was appointed or purported to be appointed shall be personally liable for everything for which, but for such order, such receiver would have been liable.
Duty of receiver selling property to get best price reasonably obtainable, etc.
439. (1) A receiver of the property of a company shall, in selling property of the company, exercise all reasonable care to obtain the best price reasonably obtainable for the property as at the time of sale.
(2) Notwithstanding the provisions of any instrument and, in the case of paragraph (b), section 438 (4) and (5)—
(a) it shall not be a defence to any action or proceeding brought against a receiver in respect of a breach of his or her duty under subsection (1) that the receiver was acting as the agent of the company or under a power of attorney given by the company, and
(b) a receiver shall not be entitled to be compensated or indemnified by the company for any liability he or she may incur as a result of a breach of his or her duty under that subsection.
(3) A receiver shall not sell by private contract a non-cash asset of the requisite value to a person who is, or who, within 3 years prior to the date of appointment of the receiver, has been, an officer of the company unless the receiver has given at least 14 days’ notice of his or her intention to do so to all creditors of the company who are known to the receiver or who have been intimated to the receiver.
(4) In this section—
“non-cash asset” and “requisite value” have the meanings given to them by section 238 ;
“officer” includes a person connected (within the meaning of section 220 ) with—
(a) a director of the company,
(b) a shadow director of it, or
(c) a de facto director of it.
Preferential payments when receiver is appointed under floating charge
440. (1) Where either—
(a) a receiver of the property of a company is appointed on behalf of the holders of any debentures of the company secured by a floating charge, or
(b) possession is taken by or on behalf of those debenture holders of any property comprised in or subject to the charge,
then, if the company is not at the time in the course of being wound up, the debts which in every winding up are, under the provisions of Part 11 relating to preferential payments, to be paid in priority to all other debts, shall be paid out of any assets coming to the hands of the receiver or other person taking possession as mentioned above in priority to any claim for principal or interest in respect of the debentures.
(2) In the application of the foregoing provisions, section 621 (2)(c) shall be read as if the provision for payment of accrued holiday remuneration becoming payable on the termination of employment before or by the effect of the winding-up order or resolution were a provision for payment of such remuneration becoming payable on the termination of employment before or by the effect of the appointment of the receiver or possession being taken as mentioned above.
(3) For the purposes of this section, the periods of time mentioned in the foregoing provisions of Part 11 shall be reckoned as beginning after the date of the appointment of the receiver or of possession being taken as mentioned above, as the case may be.
(4) Any payments made under this section shall be recouped so far as may be out of the assets of the company available for payment of general creditors.
Delivery to Registrar of accounts of receivers
441. (1) In this section “initial period of 6 months”, in relation to a receiver, means the period of 6 months falling after the date of his or her appointment.
(2) Except where section 430 (3) applies, a receiver of the property of a company shall send to the Registrar—
(a) within 30 days after the expiration of—
(i) the initial period of 6 months, and
(ii) each subsequent period of 6 months,
and
(b) within 30 days after the date on which he or she ceases to act as receiver of the property of the company,
an abstract in the prescribed form showing—
(i) the assets of the company of which he or she has taken possession since his or her appointment, their estimated value and the proceeds of sale of any such assets since his or her appointment,
(ii) his or her receipts and payments during that period of 6 months or, where he or she ceases to act as mentioned above, during the period from the end of the period to which the last preceding abstract related up to the date of his or her so ceasing, and
(iii) the aggregate amounts of his or her receipts and of his or her payments during all preceding periods since his or her appointment.
(3) A receiver who makes default in complying with subsection (2) shall be guilty of a category 4 offence.
Enforcement of duty of receivers to make returns
442. (1) Subsection (2) applies if a receiver of the property of a company—
(a) having made default in filing, delivering or making any return, account or other document, or in giving any notice, which a receiver is by law required to file, deliver, make or give, fails to make good the default within 14 days after the date of service on him or her of a notice requiring him or her to do so, or
(b) having been appointed under the powers contained in any instrument, has, after being required at any time by the liquidator of the company to do so, failed to render proper accounts of his or her receipts and payments and to vouch those receipts and payments and to pay over to the liquidator the amount properly payable to him or her.
(2) Where this subsection applies, the court may, on an application made for the purpose, make an order directing the receiver to make good the default within such time as may be specified in the order.
(3) In the case of any such default as is mentioned in subsection (1)(a), any member or creditor of the company or the Registrar may make an application for the purposes of this section.
(4) In the case of any such default as is mentioned in subsection (1)(b), the liquidator of the company is alone entitled to make an application for the purposes of this section.
(5) In either of the foregoing cases, the order under this section may provide that all costs of and incidental to the application shall be borne by the receiver.
(6) Nothing in this section shall be taken to prejudice the operation of any enactments imposing penalties on receivers in respect of any such default as is mentioned in subsection (1).
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.