Receivership query?

My husband is a director in a company whose parent company has gone in to receivership, does this now mean that his company is in receivership by default ?

He is owed a bonus payment based on last years performance half of which was paid last month and the other half due to be paid at the end of this month with his salary. Would he now be entitled to be paid this bonus and his salary or would they be classed as a preferential creditor ?

Re: Receivership

The subsidiary company is not in receivership.

However, it is an asset of the company that is in receivership so depending on what assets are available to the receiver he/she may or may not have to use the subsidiary company to discharge the liabilities of the parent company. As far as I am aware, this means that the receiver could sell the subsidiary company to make some money for the holding company but is not entitled to start striping the assets of the subsidiary company.

Your husbands claim will rank as preferential and if the receiver is appointed under a floating charge he will have to be paid before the bank gets paid. However, if the receiver is appointed under a fixed charge your husband will be paid after the bank and therefore may have to rely on the Department of Trade, Enterprise and Employment to discharge his claim. The problem with making a claim to the DETE is that they cap claims at €600 per week.

From previous experience there is in general nothing to panic about however, if your husband does not get paid on schedule it is important to put some pressure on management to pay.

Hope this makes some sense to you.

Re: Receivership

Thanks for your advice Jack.