Why Hire a Receiver
A receiver is a neutral, court-appointed officer granted certain powers and authority to preserve and protect estate property that is the subject of litigation. This authority often provides the receiver the same powers as a board of directors or officer to manage a company’s business affairs, to minimize the risk of liability by holding property outside the normal chain of title, to preserve assets so as not to cause further waste or fraud while investigations are ongoing, and in certain jurisdictions to operate under an automatic stay and sell property free and clear of liens, similar to bankruptcy. The receiver’s principal focus on preserving and marshaling the company’s operations and property allows the parties in litigation to concentrate on their clients’ goals.
How Receivers Work with Regulators
A regulatory agency may recommend the appointment of a receiver to a court in a case brought by the agency where the agency has alleged statutory regulatory violations, fraudulent behavior, breach of fiduciary duties, or concerns that assets may be concealed, dissipated, or damaged while a civil investigation is ongoing. The court’s order appointing the receiver typically directs the receiver to marshal, preserve and recover assets, cooperate with the agency and defendants in providing access to information and documents. The receiver is also often ordered to liquidate assets for the benefit of all stakeholders and provide a final account to the court of all the assets collected and liquidated, and distributions made.
Benefits of Working with a Receiver
A trusted receiver can benefit all the parties to a legal dispute by protecting the assets involved, preserving the value of the assets, reducing potential liability to owners of the assets, increasing the likelihood of settlement or resolution of the dispute, and as neutral officers, providing comfort to all parties that they are treated equally.
NAFER’s Preparation for Receivers
NAFER helps receivers and elevates receivership practices by:
- Developing and disseminating best practices and ethical standards for equity receivers to improve the quality, efficiency, and harmonization of receiver practices.
- Building and sharing a repository of model documents, legal research and briefs, and conference materials on topics commonly faced by receivers.
- Serving as a member information resource, providing a forum for education, networking, and professional development.
- Delivering excellent education through its annual national conference, regional events, Receivers’ Huddle webinar series, and recurring international events.
- Providing a forum for receivers and their professionals to exchange ideas and experiences, share solutions, and ask questions about legal and practical issues receivers face, including within NAFER’s online website communities.
- Creating opportunities for members to work on active and engaged committees.
- Giving members access to member directories, peer reviewed publications, free admission to regional education events, discounted conference fees, and other benefits.