The age-old question of exactly what is the effect of a loss of a receiver’s agency

We all know that if an individual borrower is made bankrupt or dies or if a corporate borrower goes into liquidation or becomes dissolved, any receiver appointed (before or after the event) loses the agency relationship he or she would have previously had. While this termination does not prevent the receiver continuing from being appointed (if not already) or continuing in office, it can affect the way in which he or she deals with property they are appointed over.

One of the best examples to use is if a lease is to be granted over the property and agency has been lost.

Under the terms of most legal charges, a receiver will be given the power to enter into leases. The agency relationship usually afforded to the receiver enables the receiver to enter such a lease in the borrower’s name excluding any personal liability…

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