Receivership

When a company is sick (financially speaking) and cannot meet its payment obligations to its creditors, it can be placed into "receivership" by the courts. This means that a court-appointed receiver (often this will be a well-known accounting firm) will manage the affairs of the company for an interim period of time during which the receiver will consider proposals from various stakeholders to rescue the company. During this period, the company is allowed to continue doing business, albeit with certain restrictions. Some companies will emerge from receivership and prosper while others may simply be liquidated.