Bankrupt business in receivership- who is the RP?

[kurnal]

If a business goes bankrupt and a receiver is appointed and trys to keep the business going and find a buyer, many of the employment rights of staff can be affected.

Please can anyone define who is the RP under the Fire Safety Order during this time?

I cant seem to find any definitive answers online.

[colin todd]

Yawn---there already have been several cases of this arising , Big Al.

[kurnal]

Thanks so much for the helpful insight Col.
 

[colin todd]

Always na pleasure to help an old man in the twilight of his life.

[Midland Retty]

Come on Uncle Col...

Tis the season of goodwill to all men, including English men, and Derbycestershirians like 'Big Al'.

I would also like to find out how the "land lies" in respect of companies in receivership

So educate us Sir Col - if not for Big Al, how about for me - your bestest ever friend in the whole wide world. There could be some Talisker in it for you.

[AnthonyB]

We are often in this situation with some of our clients. The receiver appoints a Managing Agent to keep the place ticking over whilst a buyer is found.

The Agent appoints us and we are working for the Receiver c/o Acme Management Ltd.

The fire authority in the initial instance serve notice on the company secretary of the agent by virtue of the agent having day to day control and a fair amount of spending authority over the site.

[kurnal]

Thanks Anthony but I would suggest the Managing Agent is a person having control but would like to know who is the employer during the period of receivership or administration?

I am thinking in particular of articles 19 and 21.

[wee brian]

who pays the employees?

[kurnal]

I dont really know. I believe the company in administration pays the wages but  only subject to the permission of the receiver to do so. 

[kurnal]

I have been given the following advice from a good source.

"It will normally be the company in administration/receivership that is the employer. One of the texts we often refer to says the following:
 
"Who is the employer?
Subject to the following exception, the insolvency practitioner is merely the agent of the company and so the employer remains the insolvent company. However, in court-appointed receiverships over the undertaking of a company, the receiver is the principal of the company and so will become the employer of any employees that they choose to retain.  "

On that point about court appointed receivers it says there are two categories:

A  court appointed receiver of the company - the receiver is the agent of the company, and so not the employer
A court appointed receiver of the undertaking of the company - the receiver is the principal and  if he retains employees he is the employer. By undertaking I think they mean the business - ie where the receiver is appointed over the business, rather than over the company that owns the business.

Does that make some sort of sense? There are a number of different types of insolvency procedure, but I think the point to take away is that whichever type it is, then apart from that one exception, the company is the employer."

Is that right Colin and in accord with what you already knew but did not wish to share with us?

[Midland Retty]

Thanks Kurnal. I was given a similar explanation recently, the exception being that your response seems to be based on a reliable source, whereas my version of events came from an 'arm chair lawyer' down the pub.

Intresting to note the difference made between the status of the "agent" and the "Prinicpal"  Again my source claims that when the receiver acts as an agent he or she is solely employed to find a potential investor / buyer to rescue the troubled company, or wind it up if a buyer can't be found.

Whereas a receiver acting as Principle will effectively take over control of the business and its liabilities  from the existing directors, and then try to turn the companies profits around (in other words the receiver may think the company could be profitable under their management, and that the company only failed because the previous directors were incompetent).

[kurnal]

Hi Midland. I was also sent a copy of a table explaining the different situations relating to orders of a court and will forward the whole comment to your email address if you wish.

[Tom Sutton]

Kurnal it appears that there is a major difference between a company in administration and receivership check out http://www.becomingbankrupt.co.uk/going-into-receivership.html

[Midland Retty]

Hi Midland. I was also sent a copy of a table explaining the different situations relating to orders of a court and will forward the whole comment to your email address if you wish.

Thanks Kurnal - would appreciate that.

[CivvyFSO]

This may help, or muddy the waters......

http://www.hse.gov.uk/enforce/enforcementguidesc/identifying/insolvency.htm