Receivership

receivership-lawReceivership avoids the rush to bankruptcy court and may help return an ailing company to profitability with a minimum of invasiveness and related professional costs. When solvency is not a viable goal, a sale or liquidation may be best accomplished by a receiver- without the added costs associated with bankruptcy. A properly-conducted receivership often provides a more flexible venue for problem resolution and delivery of value. Consider receivership- a valuable business option:

  • A receivership is legal proceeding in which the court appoints an independent third party as the receiver to take control of the business operations or the assets of a company.
  • The receiver may operate the business or may liquidate it.  Receivers may be appointed for many different reasons, such as to run a business during a shareholder dispute, or to take control of a business that has defaulted on loans, or to take control of real estate during a foreclosure proceeding.
  • A receiver investigates fraud, recovers assets, liquidates assets, and operates businesses.
  • A Judge appoints a Receiver to manage or protect the condition or value of the assets.
  • The Receiver oversees and takes care of the ‘assets’, under the supervision and direction of the Court. The Court orders are specific as to the duties and responsibilities of each Receiver assignment. The Receiver works independently of all other parties, reporting only to the appointing Judge
  • Receiver’s appointment arises in cases involving a business problem or lawsuit, bankruptcy or foreclosure. In certain instances, a Receiver is requested to be appointed in cases involving a divorce, estate, guardianship or trustee situations, including but not limited to cases for the benefit of minor children.
  • Ideally, a Receiver would work to protect or even improve or increase the value and condition of the property assets. However, many times these assignments offer limited resources, liquidity or cash flow. In those situations, the Receiver works within the limits of available funds and resources to protect and maintain the property assets until the property is sold, or the court directs and settles the disposition of the assets.

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