Frequently Asked Questions
Are Receiverships expensive?
It depends on the circumstances of each case. In general, a receiver charges an hourly rate for services. There are also costs and expenses associated with a receivership, such as clean-up, court filing fees, title reports, and the like. A receiver can hire professionals, such as lawyers, accountants, realtors, and others, to assist the receiver. In some cases, a secured creditor asks for appointment of the receiver and may pay some up-front costs and fees until the receiver generates funds from the business, such as by selling equipment or by completing contracts. Receivers may charge a commission depending on whether the case involves liquidation of real property or handling of special assets. For receiverships under state court supervision, the receiver is required to provide notice and seek approval to employ professionals. If acting as an agent under an agreement of the parties, the terms of the agreement will dictate fees and costs. At 2S Management, we disclose our fees up front and work with parties to determine whether our services are a cost-effective solution.
Does a Receiver require a court proceeding?
Not necessarily. If a receiver is acting as an agent pursuant to an agreement (not as part of a court proceeding), the terms of the agreement will define the purposes, powers, duties, and goals of the agent.
What are the benefits of a Receivership?
Creditors can ensure that the assets that secure the loans they made to a business are protected, both physically and in terms of value, until their claims are handled successfully by a receiver. A receivership can have advantages over a federal bankruptcy proceeding, including being a less expensive, different court oversight governed by different rules, and affording a creditor direct access to the business. A business can get a neutral, objective professional to oversee problems that may concern management, operations, financials, and more. A receiver can help position a business to thrive after the receiver’s work is done and creditors are satisfied.
Who does the Receiver act on behalf of – the business or the creditor?
Under Oregon’s Receivership Code applying the state court proceedings, a receiver is a court-appointed fiduciary with obligations to the “receivership estate” – consisting of the business and its assets. An owner is obligated to provide information, to facilitate access, and to cooperate with the receiver. The receiver is obligated to use the receiver’s business judgment in liquidating or operating the business to provide the greatest return for creditors, claimants, and, ultimately, the business owners once all claims against the business have been resolved.