Insolvency occurs when a business (or individual) is no longer able to meet their financial obligations and enters administration. At which point, their creditors (the parties to whom they owe money, such as banks) appoint a receiver, a person who takes over control of the insolvent business’s property and assets.
Recent years have seen their fair share of high-profile insolvencies, particularly on the high street, with retailers such as BHS going into administration and shutting up shop. And this trend seems likely to continue in the light of the uncertainty over Brexit, a stagnating economy and rising interest rates may push already struggling businesses to breaking point.
So what happens when the receivers are called in? Their primary responsibility is to secure the assets of the insolvent business, to protect the interests of its creditors. This may well mean taking control of any properties owned by the business, ensuring they have been properly vacated and are then protected from risks such as squatting or trespass and vandalism.
Receivers have responsibility for the property within 24 hours of taking it over - with all of the liabilities that entails. They need to be able to secure that property as quickly as possible and that is where Vigilance can help. We are often the first call a receiver makes, because we can mobilise at short notice to safeguard assets, whether that’s by installing alarms and CCTV, steel doors or live-in security personnel.
When it comes to securing a vacant property, receivers often work to meet insurance requirements. These requirements can be fairly basic, specifying the minimum levels of protection - which can be as little as fitting a basic alarm system. Although this approach ticks boxes, it can be a false economy with an expensive downside if a property is vacant and subsequently subject to vandalism. Increasingly insurers are specifying more coherent requirements that blend services to create a risk-appropriate solution.
Receivers must consider the risks posed by an improperly secured property: theft, vandalism, trespassing and associated asset damage and value depreciation are all common occurrences in vacant commercial properties, and are costly to correct. On the other hand, having a more robust security strategy, such as live-in security, represents a higher upfront investment, but one that pays off in peace of mind, lowered threat and risk and a properly secured asset. It’s a cost-benefit analysis worth making.
Vigilance are specialists in providing a wide range of security services to protect vacant commercial buildings. From installing alarms to providing highly trained live-in staff, we cover the entire spectrum of building security. Our industry expertise means we are able to assess your unique needs and provide tailored recommendations that will ensure your property is fully protected from every security risk.
When your assets need protecting, Vigilance is your first point of call. Get in touch at firstname.lastname@example.org.
This month we interviewed Julian Healey, who heads up NARA, the Association of Property and Fixed Charge Receivers, to hear his thoughts on the issues surrounding insolvency, receivership and security.
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