A receiver is typically appointed when a business is experiencing operational problems due to a dispute among owners/shareholders, non-payment of outstanding debt, the death of a principal, or some other potential issue. Based upon the circumstances surrounding the business, the receiver will either work to conduct an orderly winding up of the business or operate it as an ongoing concern while the parties work through their issues/differences. The purpose and nature of each situation dictates the context of the receivership.
As a receiver, we have a fiduciary responsibility for all of the assets of the receivership. Our goal is to maximize returns from these assets for the parties involved. Following is the process we use to possess, protect and preserve the assets in question.
- Identify all assets and their location— including bank accounts, accounting records and all other property.
- Take possession of these same assets and provide notice to affected parties. Our goal is to move expeditiously during this process to avoid any loss and potential negligence.
- Review insurance and related items to ensure they are in force and adequate for the property being covered.
- Complete an inventory of assets, including accurate descriptions, serial numbers, etc. During this time, independent valuation of the assets may be required.
- Open new bank accounts and establish new accounting records for the property.
- Communicate with the following where applicable: employees, suppliers, creditors, unions or other stakeholders.
Whether the receivership operates in the short-term or over a longer period is taken on a case-by-case basis. Many elements must be discussed with the parties before a determination is made.
Our group has experience with a wide-variety of businesses including dealership floor plans, commercial real estate and rental properties.