In light of our current economy and the effect of high vacancies, tenants vacating prior to the end of their term, commercial owners overleveraging their properties, it is becoming more common for the courts to appoint a Receiver to step in between the borrower and lender to mange during a hold, lease, market and dispose of an asset during the litigation process. This decision is becoming more prominent with lenders in our market as the number of commercial properties slip into foreclosure status. Pamela Van Vleck, one of the primary principals of CPSWFL has acted as a court appointed receiver for commercial assets throughout southwest Florida, in areas from Fort Myers up to Orlando, FL.
Receivers are typically appointed by the court as a ‘neutral fiduciary’ or recommended by the lender as plaintiff. Receiverships can be done on a state or federal level. The Receivers duty is to control assets, businesses and other real properties involved in litigation in order to preserve them during the pending outcome of said litigation. The court of jurisdiction is typically the circuit court in the county where the commercial property is located.
Specific court language refers to a ‘receiver’ as the hands and eyes of the court, thereby carrying out any necessary actions to preserve the assets of the receivership estate. The Receiver is not a representative or agent for the party owning these assets or the plaintiff, who is typically the lender; but rather, a Receiver is granted powers as an officer of the court to benefit all parties involved in the litigation. Receivers are typically required to hold and manage the businesses and assets in question, or sell the assets for liquidation.
Courts may ask the Receiver as a neutral fiduciary to research past accounting records, discover and search for hidden assets or conduct forensic accounting searches. Receivers often have to hire other experts for a particular task, i.e. leasing agent, property management, etc. Any party refusing to provide required information for the court could result in contempt proceedings against the refusing party.
Receivers are paid with the estate in question’s assets, which also relieves a party to the legation. Receivers are typically compensated on an hourly fee plus expense basis, or an agreed upon flat fee paid monthly. Appointing a Receiver is financially advantageous to the court as well, as any requests given the receiver and numerous court appearances by the parties to the litigation.
Receivership comes to an immediate halt when a bankruptcy action is declared. Due to a potential conflict of interest, the bankruptcy trustee cannot appoint the same Receiver already in place.
- "Our relationship has been a great personal and business asset to me in more ways than one. It was good to know that you were always there for us with great wisdom, kindness and concern for our well-being." ~ T. Brady
- “Gretchen - I would like to take a moment to send you a Thank You for all the assistance that we received from your Cushman and Wakefield office. This was our first brick and motor location and your entire team was awesome to deal with! ” ~ Roy Yonkers
- “Pam and Tammy, Thank you for all of your efforts on our behalf this year. You have helped make 2016 a banner year for the Asset Disposition Team at Fifth Third and I greatly appreciate all that you have done.” ~ Clyde Measey