Difference between a receiver and a receiver/manager
“A receiver means a person who receives rents or other income, paying ascertained outgoings; but he does not manage the property in the sense of buying and selling anything of that kind. The receiver merely takes the income and pays necessary outgoings; the manager carries on the trade or business”, per Jessel MR in Re Manchester & Metford Railway (1880) 14 Ch D 645.
The purpose of making provision for the appointment of a receiver/manager is to keep the business alive in order to sell it as a going concern, i.e., to restore the company to financial stability, akin to a company doctor.
Unless the receiver is given powers as manager the receiver is restricted in his/her function. The receiver’s obligation (in the case of appointment by a debenture holder) is to realise the secured property only; any exercise of managerial power by a receiver who is not also manager renders him/her in those actions a trespasser ab initio and his/her acts are unauthorised.
The power to appoint a receiver/manager is bestowed by the debenture document. A manager can, however, only be appointed where the charge is over the business of the company, that is, over “the whole of the undertaking” or on “the undertaking and property”. If the security for the loan is only part of the company’s assets a manager may not be appointed. A receiver/manager may be appointed by the court or out of court.