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Enforcement through Compulsory Receivership of the Enterprise

Summary/Abstract: The compulsory receivership of an enterprise is a form of restriction of entrepreneurship as the debtor is deprived of the right to make business decisions. However this method of enforcement allows the creditor to satisfy his claims without the need of selling the enterprise. The enforcement is admissible, only, when the debtor acts as an entrepreneur and conducts his business as the enterprise i.e. he uses its tangible and intangible assets for the purposes of his business activity. The enforcement may apply to part of the enterprise if this part can be used to conduct it’s business separately from the main enterprise and if any revenue generated from the compulsory receivership of this part of the debtor’s assets is sufficient to satisfy any claims enforced by creditors. The enforcement is conducted by a court acting as the enforcement authority, where the receivership of the enterprise is conducted by a compulsory receiver who cannot be its creditor. The court appoints a specialized entity as the compulsory receiver who can be either a natural person or a legal persona. The aim of the receiver is to generate income from the business conducted by the enterprise. The receiver is liable to dismissal if it the receivership is improperly conducted. In the enforcement of compulsory receivership of the enterprise the receiver is responsible for making a plan for the settlement of creditors.

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