A Receiver is a court-appointed third party who is charged with preserving and protecting real estate and business assets when litigating parties cannot come to agreeable terms. In business disputes, probate matters, loan default situations, and family law disputes, suspicion and distrust are frequently at the root of the issue. In these types of matters, Receivership (sometimes known as Special Master appointments in family and probate matters) is arguably the most effective way for parties to control revenue and expenses, secure accurate and comprehensive financial information, attain clarity regarding valuation, stabilize operations and achieve resolution—whether for business, investor, familial, marital or estate assets.
R.O.I. specializes in the complex legal environment of court-appointed/supervised Receivership proceedings, having been appointed in over 100 cases, valued at more than $350 million in assets during the past seven years. Our clients choose to work with us because of our ability to expeditiously identify issues, our experience and ability to develop a thoughtful, strategic and cost-effective plan, and our skill in adapting to the variety of situations we encounter. The benefits of using R.O.I. as a Receiver are numerous, including, but not limited to:
- Protecting and preserving assets. The first step of a Receivership action is essentially triage: making sure that money or other assets do not disappear, or dissipate, due to improper controls over the business or family property/interests.
- Leveling the playing field. With a court order and a Receiver who’s authorized to seize control of the assets, everyone has access to same information, all of which is governed by a third party with distance, objectivity, and open two-way communications.
- Adding value. A Receivership operational plan spans all of the critical steps in the process. Implementing proper accounting ensures all necessary procedures are in place to protect the asset value and cash flow. Expert marketing results in faster sales at the highest and best use, including recommendations for advertising and collateral materials, a marketing and sales analysis, a competitive incentive program, and a strategic plan to increase sales velocity.
- Decreasing liability. Receivership protects lenders or other parties from the potential of having to take ownership of an asset and the resulting downsides, including legal and environmental claims as well as the lower sales prices that may accompany a distressed sale.
- Saving time and money. A well-executed Receivership is neither as complex nor as expensive as many lawyers and judges may think, and can actually be less costly than extended litigation. Using a Receivership can lead to an equitable resolution on a more expedited basis.
- Enhancing potential for settlement. Finally, the simple act of petitioning the court for a receiver conveys the seriousness of a situation to the opposing party. Concerns about additional costs and loss of control can lead to the desire for a settlement.
R.O.I.’s Strategy and Process for Receivership Matters
R.O.I. assists in preparing the proposed Receivership Order and assisting in the Receivership hearing(s) to ensure that all issues are addressed in conjunction with the initial appointment.
Comprehensive receivership reports (opening, monthly, interim, and closing) are filed in a timely fashion, on or before the 15th day of the month following the prior month of activity. The general steps for most Receivership engagements follows:
- Asset Intake. Receivership assignments begin with a thorough analysis of the asset(s), a careful review of all documents that govern/impact the property(ies)/assets, and multiple onsite inspections. The results are synthesized into an Asset Intake Report that explains both short- and long-term strategies for management, sales, leasing, and/or other business operations as applicable.
- Operational Plan. The Asset Intake Report guides our Operational Plan. Based on the client’s needs, R.O.I. is prepared to provide qualified personnel to manage the property/business operation, from day one. Our client services team is trained, qualified, available and prepared to adapt to the variety of situations we encounter on these assignments.
- Accounting. Our centralized accounting team is prepared to complete a thorough assessment and written report of the financial situation of the property—and implement all necessary procedures to preserve, protect and enhance the asset value and cash flow.
- Asset Stabilization and Operations. Our client services team is trained, qualified, and prepared, ensuring that we implement a thoughtful, timely and flexible Operations Plan, while remaining nimble enough to adapt to the variety of situations we encounter on these assignments.
- Marketing. Our full-service brokerage operations will undertake a Broker’s Opinion of Value and complete a comprehensive review of the current marketing program. In addition to a BOV, R.O.I. will also provide recommendations for advertising and collateral materials, a marketing and sales analysis, a competitive incentive program, and a strategic plan to increase sales velocity.
- Reporting. From Asset Intake to our Monthly Receivership Reports, all parties and the judicial officer(s) will have timely and comprehensive monthly reports, which include an operational review, factual findings, a physical overview, a rent roll with an analysis of lease issues, and a case overview with legal posture. We also develop and present comprehensive financial statements including profit and loss/income statements and balance sheets, which include cash flow projections/budgets, and a banking overview.