What role does receivership play in restructuring?

Receivership plays a crucial role in restructuring by appointing a third party to manage the company. This typically occurs when the company is unable to operate effectively on its own due to financial distress or legal issues. The appointed receiver, who is often an experienced manager or a firm specializing in turnaround situations, takes control of the company's operations with the objective of stabilizing the business, preserving value, and ultimately facilitating a successful restructuring process.

This arrangement allows for an unbiased and professional approach to management during a time when the company's leadership may be compromised or unable to focus on the critical tasks required for recovery. The receiver can implement necessary changes, engage with creditors, and develop a restructuring plan that maximizes value for stakeholders.

The other options do not accurately represent the nature of receivership. Ownership does not necessarily regain control in this context; rather, it is relinquished to the receiver. Receivership is not an immediate liquidation process; it may involve selling assets over time to pay debts, rather than liquidating everything at once. Lastly, it does not eliminate debts without intervention; instead, it seeks to address debts in a structured manner while working toward recovery.