Francesco Muscato took over the family funeral business in 1995 and set about updating the company's products and image. Francesco changed the name of the principal operating company to Rest Forever Pty Ltd and within a few years Rest Forever Pty Ltd had:

-10 funeral homes throughout Australia, all of which are rented;

-a substantial quantity of equipment (including hearses and cremators) leased from finance companies and secured by personal guarantees from Francesco and his wife; and

-a subsidiary company called Pets Funeral Service Pty Ltd, a funeral service for domestic pets.

In the early 2000's it has become much harder to persuade people to spend money on funerals for their pets, so Pets Funeral Service Pty Ltd has been running at a loss for several years. This is unlikely to change in the foreseeable future.

Pets Funeral Service Pty Ltd borrowed AUD $1million from Lendtrax Ltd secured by a security interest in a non-circulating asset (previously known as a fixed charge) and a circulating asset (previously known as a floating charge) on all of Pets Funeral Service Pty Ltd's assets. Pets Funeral Service Pty Ltd is unable to pay the loan. The trust deed allows Lendtrax Ltd to appoint a receiver in the event of default. The holding company, Rest Forever Pty Ltd, is very profitable and is independent from Pets Funeral Service Pty Ltd.

REQUIRED:

With reference to the Corporations Act 2001 (Cth) discuss whether Lendtrax Ltd can appoint a receiver under the Corporations Act 2001 (Cth) for the AUD $1M loan borrowed by Pets Funeral Service Pty Ltd, and if so, what actions the receiver can take?

Note: You are required to use the 4-step process in answering this question.