Appendix 2 – Risk of key creditor action

Class of Creditor	Type of Action that can be taken
Secured creditor with a floating charge	Can appoint an Administrative Receiver *
Secured creditor with a fixed charge (including a mortgagee)	Can enforce by taking possession over charged assets and/or appointing a fixed charge receiver (or taking possession as mortgagee).
Judgement creditors	Can: Petition to wind the company up Execute judgement – e.g. attachment of an asset or garnishee
Landlords	Rights of distraint, re-entry and forfeiture for default of conditions and non-payment of rent.
Creditors with retention of title	Have retention of title (ROT) over unpaid goods (if ROT valid), therefore can reclaim relevant goods
Creditors with liens (this would include solicitors’ liens, stockbrokers’ liens, accountants’ liens, bankers’ liens, repairers’ liens, shippers and carriers’ liens, and any contractual, equitable or statutory liens.)	Have liens over goods for unpaid bills. For example, a garage may have a repairers liens over a repaired vehicle until work is paid for.
Trade creditor	Trade creditors can often put themselves in a very powerful position by refusing to supply goods (at worst) or only supply goods on a cash basis. This can make trading in a turnaround impossible.
Inland Revenue, Customs and Excise and Rating Authorities	Have powers of distraint for unpaid PAYE, NIC, VAT and rate.

* Important note: at the time of writing there are possible legislative changes that may abolish administrative receiverships

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