What a receivership is
A receivership places a company's property under the control of a receiver appointed by a court, a regulator or a secured creditor. It is common for failed banks in the United States and for secured lender enforcement in some common law countries.
- A receiver is a person placed in custodial responsibility for the property of others, appointed by a government regulator, privately or by a court, with powers that flow from the documents underlying the appointment.1
- US bank regulators can place failing banks into receivership. When Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation on 10 March 2023, the FDIC was appointed receiver.1,2
- In the UK, a holder of a floating charge can appoint an administrative receiver to recover the money owed, usually without court involvement. The receiver pays their own costs, preferential creditors and the floating charge holder, and unsecured creditors receive nothing from the receiver.3
- For floating charges created after 15 September 2003, the Enterprise Act 2002 restricts administrative receivership to specified sectors such as capital markets and utilities.3
- In Kenya, a secured lender can appoint a receiver manager, as KCB Group did for Mumias Sugar Company in September 2019.4
Sources
- Wikipedia, Receivership (27 October 2026)
- Federal Deposit Insurance Corporation, Silicon Valley Bank (failed bank information)
- The Insolvency Service (GOV.UK), Options when a company is insolvent (11 February 2016)
- The Star (Kenya), Court cancels Mumias Sugar lease to Ugandan firm (30 December 2021)