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Why Court Appointed Receiverships Make Sense for Companies

October 9th, 2021

Bankruptcy is a last resort for companies in financial trouble. It tarnishes reputations, leaving customers questioning the reliability of the products they buy. It may be possible to come out of the process and rebuild, but another alternative can keep the business running and creditors paid. Court-appointed receiverships work to assess a company’s viability, existing debts, and oversee the property and assets until the receivers have completed their duties.

5 Reasons to Use Court-Appointed Receiverships

When a borrower can no longer handle their assets, banks and private lenders may opt for a court-appointed receiver to step in and stabilize things. As a property investor, consider these reasons for a receivership instead of bankruptcy:

  1. It’s less expensive than bankruptcy: The bankruptcy process is costly. If a debtor can’t afford to hire an attorney and pay for the filings fees, then a creditor needs another alternative. Receiverships offer that option. This process still has fees associated with it, but they are less expensive than a bankruptcy.
  2. The receiver is a neutral third party: Pitting a Plaintiff against a Defendant can be a recipe for disaster. A third party offers a different and new perspective on the matter of the property involved. The receiver works as a mediator to seek out a mutually favorable outcome.
  3. There are additional options offering greater flexibility: The receiver can develop strategies to improve asset management and pay debts. These strategies are often more straightforward than what would occur in bankruptcy proceedings. It is also possible that this flexibility provides creditors, lenders, and stockholders more money, and the debtor company may be saved from liquidation.
  4. It saves the reputation of the debtor company: Bankruptcy can be a very embarrassing ordeal. Filing for bankruptcy requires the company to report all assets, liabilities, and finances with the court. Receivership requires a pleading to be filed via paper format and is less readily available to the public. The process makes this less likely to tarnish a company’s reputation.
  5. It takes less time. Because of the procedural requirements, bankruptcy takes quite a bit of There are Section 341 creditors’ meetings, plans and disclosure statement filing requirements, and solicitation process and confirmation hearings. Receivership offers a streamlined, expedited process to come to a conclusion quickly.

Depend on The Estes Group for Your Court-Appointed Receivership Needs

Take advantage of the benefits of a receivership when you work with The Estes Group. We work hard to assess your investment’s viability considering the property’s needs. We review the existing leases and facilities and develop a plan to maximize cash flow, as well as handle disputes, dissolutions, and liquidations. We have the experience you can depend on to get the most from your distressed property. Talk with us about court-appointed receivership needs in Louisiana, Alabama, Mississippi, and Tennessee.

Call us at 601-362-9633 or contact us online to discuss your real estate goals with our knowledgeable and experienced court-appointed receivership staff. We’ll help you through the receivership process in Louisiana, Alabama, Mississippi, and Tennessee.