receivership
C1/C2Formal, Technical, Business, Legal
Definition
Meaning
The legal status of a company or property placed under the control of an independent person (a receiver), usually appointed by a court or creditor, due to financial difficulty or insolvency.
A situation in which a company or person cannot meet financial obligations and their assets are managed by an external administrator to repay debts; can also figuratively describe a state of being taken over or managed due to failure.
Linguistics
Semantic Notes
The term strongly implies legal, financial, and administrative intervention. It is outcome-oriented, typically aiming to repay creditors and possibly avoid liquidation. It is a state or condition, not an action.
Dialectal Variation
British vs American Usage
Differences
In the US, 'receivership' is one of several bankruptcy/insolvency proceedings, often used for specific assets or public utilities. In the UK, 'administration' is a more common corporate insolvency procedure, but 'receivership' (particularly administrative receivership) is a well-understood historical and legal term, now more restricted in use.
Connotations
Both varieties carry strong negative connotations of business failure. In the UK, post-Enterprise Act 2002, administrative receivership is less common, making the term sound somewhat historical or specific to certain debt types (e.g., floating charges). In the US, it retains a specific, ongoing legal meaning.
Frequency
Moderately low frequency in general discourse, but common in specialised financial, legal, and business news. Slightly higher relative frequency in US financial journalism compared to UK, where 'administration' or 'insolvency' are often preferred in news headlines.
Vocabulary
Collocations
Grammar
Valency Patterns
The company entered receivership.The firm was placed in receivership.They are operating under receivership.It emerged from receivership.Vocabulary
Synonyms
Strong
Neutral
Weak
Vocabulary
Antonyms
Phrases
Idioms & Phrases
- “To be in the hands of the receiver.”
- “On the brink of receivership.”
Usage
Context Usage
Business
The retail chain collapsed and entered receivership last month.
Academic
The study analysed the post-receivership performance of 50 manufacturing firms.
Everyday
Did you hear? That restaurant we liked has gone into receivership.
Technical
The debenture holder exercised their right to appoint an administrative receiver, triggering receivership.
Examples
By Part of Speech
verb
British English
- The company was placed into receivership.
- They may have to go into receivership.
American English
- The firm was forced into receivership.
- The court ordered the utility into receivership.
adverb
British English
- The business is now operating receivership.
American English
- The assets are managed receivership.
adjective
British English
- A receivership order was granted.
- The receivership process can be lengthy.
American English
- The receivership proceedings began on Tuesday.
- He specialised in receivership law.
Examples
By CEFR Level
- The shop closed because it went into receivership.
- Many people lost their jobs when the company was in receivership.
- After years of losses, the airline finally entered receivership to restructure its massive debts.
- The court's decision to place the company in receivership protected its assets from immediate seizure by creditors.
- The nuanced distinction between Chapter 11 bankruptcy and federal receivership is critical for understanding US corporate insolvency law.
- Emerging from receivership with a leaner operational structure, the firm presented a compelling case for renewed investment.
Learning
Memory Aids
Mnemonic
Think of a RECEIVER in American football – a player who catches the ball. In RECEIVERSHIP, a 'receiver' (a person) 'catches' control of the failing company to manage it.
Conceptual Metaphor
A COMPANY IS A PATIENT (It is placed under the care/supervision of a receiver, a form of financial doctor). FINANCIAL TROUBLE IS A TAKEOVER/DISABLEMENT (The company loses autonomy and is taken over by an external force).
Watch out
Common Pitfalls
Translation Traps (for Russian speakers)
- Avoid direct translation to 'получение' (which means 'the act of receiving').
- Do not confuse with 'банкротство' (bankruptcy) – receivership is a specific procedure within or alongside bankruptcy.
- The '-ship' suffix denotes a state or condition, not a place or object.
Common Mistakes
- Using 'receivership' as a verb (e.g., 'The company was receivershipped' – INCORRECT).
- Confusing 'receivership' with 'bankruptcy' (they are related but distinct legal states).
- Misspelling as 'recievership' (incorrect 'i before e').
Practice
Quiz
Which of the following is the MOST accurate description of 'receivership'?
FAQ
Frequently Asked Questions
No, they are related but distinct. Bankruptcy is a broader legal status of being unable to pay debts, often involving liquidation. Receivership is a specific procedure within or alongside insolvency where a 'receiver' is appointed to manage specific assets or an entire business to repay a particular creditor or creditors. A company can be in receivership without being formally bankrupt, and vice versa.
A receiver is typically appointed by a secured creditor (like a bank holding a floating charge), by a court order, or under the terms of a legal agreement. The appointment is usually triggered by a default on loan repayments.
Control passes from the directors to the receiver. The receiver's primary duty is to manage the business/assets to repay the debt owed to the appointing creditor. This may involve selling assets, restructuring the company, or trading it as a going concern. Employees may be retained or made redundant.
Yes, it is possible. If the receiver successfully stabilises the business and repays the relevant debts, the company can be returned to its owners or sold as a viable entity. However, it often leads to significant downsizing, asset sales, or a complete change of ownership.