Richard P. Ormond has over 20 years of experience in commercial, real estate, banking, receivership, cannabis regulation, commercial litigation and restructuring. He has heard numerous cases in state, federal and bankruptcy courts and has divorced dozens of cases. Mr. Ormond is considered one of the country`s leading experts on cannabis receivership and regulation, banking and financing. Mr. Ormond is President of the California Receivers Forum and former Chair of the Appeals Division of the Los Angeles County Bar Association. Before seeking to appoint a receiver, lenders should consider a variety of factors to determine whether this is a viable option. One of the main concerns lenders have when considering appointing a bankruptcy administrator is the associated costs.
In typical bankruptcy administration, the bankruptcy administration is responsible for all fees and costs, including administrative fees, receiver fees and fees of other professionals, which the trustee retains from time to time. Snell & Wilmer`s bankruptcy and reorganization attorneys regularly represent receivers, lenders, business owners, investors, consumers and creditors in a variety of industries and industries in state, federal and administrative enforcement proceedings. A lender usually wants to take immediate action to protect and preserve the value of its real estate collateral. As a mechanism to maintain the status quo during formation negotiations, the appointment of an insolvency administrator serves to protect the value of the collateral while giving the parties time to discuss and negotiate possible training. Without the protection provided by the recipient, parties may not be willing to devote significant resources to discussing training due to concerns that ownership may lose value during training negotiations. Summaries of relevant receivership cases An insolvency practitioner also has other advantages, including quasi-judicial immunity, which means that an insolvency practitioner generally cannot be sued because he or she performs his or her duties under judicial supervision or by order of the court. For example, if a receiver sells real estate, the sale is completed by the filing of a court order that sells those properties « as is » without any insurance or warranty – all blessed by that court. This eliminates the risk of third-party claims against the insolvency administrator or the assets of the estate affected by the sale. Conversely, if a foreclosure party (or its representative) were to sell the property, the selling party would bear the burden of liability, consumer protection regulations, and many other representations and warranties associated with the sale.
1) A neutral person (often a professional trustee) appointed by a court to manage a party`s legal interests in legal proceedings. In SEC v. Elfindepan, S.A., the Middle District of North Carolina, citing U.S. Case Law 2d on beneficiaries, defined the recipient as « an officer of justice who holds the position of custodian of the property under receivership. » The court further stated that the duties of an insolvency practitioner « owe it to all persons interested in such assets to discharge their duties in good faith and impartiality with respect to them ». This means, the court said, that an insolvency practitioner « is not the sole representative or representative of one of the parties to the dispute. and shall not be appointed for the benefit of any of the Parties. On the contrary, the court explained, « an insolvency administrator receives his or her power and authority directly from the court. [and] is therefore subject to the directions and orders of the court. A court may appoint a receiver to generally administer the receivership or appoint the receiver for a specific task – for example, to manage real estate subject to a specific mortgage, as in First Interstate Bank v.
Heritage Square, Ltd. Bankruptcy administration is an alternative to bankruptcy and may be a better option for companies in financial difficulty. Compared to bankruptcy, the receivership process is less stigmatized, requires less paperwork and involves fewer court cases. This translates into reduced costs for all parties involved. The College may stipulate that all obligations and obligations incurred by the beneficiary arise exclusively in its official capacity and are to be fulfilled only by compulsory administration funds. It should also include a provision for the payment of the beneficiary`s fees and expenses and the fees and expenses of other professionals employed by the insolvency practitioner. The typical provision states that these fees and expenses may be paid monthly after the submission of the monthly report of the insolvency practitioner of the bankruptcy administration, subject to subsequent judicial confirmation. Copies of detailed invoices from the recipient and other professionals must be included in the recipient`s monthly reports. It should be noted that court orders generally allow parties a certain amount of time (usually 5 to 14 days) within which they can appeal before the insolvency practitioner can pay these fees and costs.