ABSTRACT
With changes in economic circumstances such as a recession, many companies have to change their structures, amalgamate or pass control to creditors, rather than the investing shareholders. The board of directors may decide to engage in schemes of arrangement in order to facilitate complex changes to the corporate structure. Such schemes tend to be both expensive and time consuming. Receivership, on the other hand, comes into operation at the insistence of a secured creditor, rather than at the wish of the directors. Both systems have in common the concept that an external person takes control of the management of either the whole company or a particular asset of the company. After a period of time, the control may pass back to the management and directors of the company or a move towards liquidation may occur if there is insolvency.
