A Guide to Receiverships
A receivership is one method of avoiding bankruptcy for your company. It can sometimes get you back on track to financial prosperity.
So what is a receivership?
A receivership is the appointment of a receiver. A receiver is a trustee who is appointed to look after a struggling company’s assets and/or business operations. They generally are responsible for restructuring the way the company does business so that it doesn’t collapse and can have a new life.
How much power does a receiver have?
A lot. Generally, the receiver is granted full decision-making capabilities so that they can most effectively turn things around for the business.
Can the receiver make the sell properties and/or assets on behalf of the company?
Yes. They will often do so in order to pay off creditors (or work toward doing so). However, they will keep the needs of the business in mind and will not sell off anything that is essential to operations.
Who decides who acts as the receiver?
This role is appointed by a bankruptcy court, creditor, or governing body. These entities all have good reason to want you to succeed. As a business owner, you do not get to choose who acts as your receiver and you will likely not always agree with the decisions he or she makes for your company. Keep in mind that this is an effort to make things better for your company, not to sabotage you. Try to keep an open mind.
Is this the only situation in which a trustee would be appointed to run a business?
No. It may also occur in the case of a conservatorship. However, the purpose for this is much different. Instead of restructuring a business to avoid bankruptcy, a conservator is concerned with appointed to carry out duties on behalf of someone who is incapacitated or a minor.
My business is struggling. Who can help me decide what’s best to do next?
If your business is struggling and you don’t know what steps to take next, contact Maxwell Dunn PLC. We are committed to helping businesses and individuals in situations like yours, whether it is through bankruptcy or alternative measures like receiverships. We can’t wait to work with you to find the best solutions to your problems!See all videos