It is a legal concept which rests on the notion of the agent noun of receive. In the legal case, the receiver "receives" the rights to act (sell, liquidate, exchange, etc) the property of other people, usually bankrupt, so that creditors can get their money back.
In law, receivership is a situation in which an institution or enterprise is held by a receiver—a person "placed in the custodial responsibility for the property of others, including tangible and intangible assets and rights" —especially in cases where a company cannot meet financial obligations or enters bankruptcy.
- The common law has long recognised the concept of a receiver. Following the development of the floating charge creditors were effectively able to take security over a company's entire business by means of a floating charge over the undertaking. Security documents generally contained very wide powers of appointment such that on default the creditor could take over the business immediately and without the input of any court. A receiver appointed to the entire business became known as a receiver and manager. The receiver and manager would typically have extensive powers over the business, including the power to sell it at a time and on terms that suited the appointing creditor.