Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Insolvency definition

What does Insolvency mean? In practice, insolvency describes a financial state where a debtor cannot meet liabilities when due, triggering remedies such as administration, liquidation or bankruptcy and informing directors’ duties and avoidance claims. For companies in England & Wales, Scotland and Northern Ireland, the Insolvency Act 1986, s 123 sets two alternative tests: - Cash‑flow insolvency: an inability to pay debts as they fall due. The inquiry is practical and forward‑looking, not confined to today’s bills (Re Patrick & Lyon Ltd [1933] Ch 786; BNY Corporate Trustee Services Ltd v Eurosail [2013] UKSC 28). - Balance‑sheet insolvency: liabilities (including contingent and prospective liabilities) exceed assets on...

Receivership for dispute resolution practitioners (England and Wales): administrative, LPA and court-appointed receivers, appointment, powers and impact on proceedings

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

This Practice Note makes reference to:

the Insolvency Act 1986 as IA 1986
the Law of Property Act 1925 as LPA 1925
the Senior Courts Act 1981 as SCA 1981
the County Courts Act 1984 as CCA 1984
the Enterprise Act 2002 as EnA 2002
the Proceeds of Crime Act 2002 as POCA 2002

Scope

Receivership is notably intricate because numerous variants exist. This overview distils the principal forms of receivership and considers their effect on litigation from a Dispute resolution standpoint. It outlines the key categories of receivership and their implications for legal actions, reflecting the dispute resolution angle and reinforcing how appointments can significantly affect ongoing or contemplated proceedings.

What is receivership?

Appointing a receiver is a remedy enabling creditors and specified third parties to safeguard their interest in a company’s assets. Several categories arise depending on context, including:

administrative receivers (now uncommon following legislative reform in 2003)
LPA receivers
court-appointed receivers, including those appointed under:
- SCA 1981
- POCA 2002

Receivers’ authority is generally confined by the instrument of appointment, whether a vesting document or an order of the court.

Administrative receiver

What is an administrative receivership?

Administrative receivership involves an insolvency practitioner (IP) being appointed by a...

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Web page updated on 21/05/2026

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