Receiverships and Assignments
During the course of business or real estate litigation, such as a mortgage foreclosure case, a court may appoint a receiver to take control of a debtor’s assets in order to manage and preserve the assets’ value until the litigation is concluded. A receiver may abandon property and liquidate all or part of a debtor’s assets, depending on the authority granted by the court. We have experience with all aspects of a receivership case. Indeed, three of our partners have been appointed by state and federal courts as receivers. Whether serving as the court-appointed receiver, or as attorneys for the receiver, we know how to manage large and complex cases and understand how to maximize value for creditors.
We also have a broad range of knowledge and experience handling assignments for the benefit of creditors, commonly known as ABC cases. An ABC case is an insolvency proceeding governed by state law rather than federal bankruptcy law. While a bankruptcy may be an option for some financially distressed companies, others may opt for an ABC as an alternative method to liquidate all or part of its assets. In an ABC, all or part of the debtor’s assets are assigned to an assignee appointed by the state court, whose duties and responsibilities to a debtor’s creditors are equivalent to those of a trustee to the beneficiaries of a trust. An ABC offers a level of flexibility that bankruptcy does not and can be a cost effective option, depending on the goals of the distressed company. Meland Russin & Budwick has extensive knowledge and experience managing this state court supervised liquidation process.
Receiverships and Assignments Representative Matters
|A Florida District Court appointed MRB partner Peter Russin as Receiver over entities located in Wisconsin and Florida. The action was brought by the Federal Trade Commission and alleged that the bad actors operated a scam that lured consumers with promises of affordable health insurance but actually provided nearly valueless “medical discount” cards. The Firm is representing and assisting the Receiver in taking control of the receivership entities, investigating their operations and shutting certain of them down while allowing others to operate, and gathering assets for eventual distribution for the benefit of creditors.|
|Represented a Florida District Court-appointed receiver in a Federal Trade Commission action against bad actors involved in a bogus health insurance scheme, which included deceptive practices that harmed consumers across the country. Assisting the Receiver, the Firm took control of, and evaluated the business operations, determined they should be shut down and did so, and gathered assets for the benefit of creditors. The receivership was transferred to a Texas District Court, where the Firm, assisting the Receiver, worked with a Texas receiver over affiliated entities and eventually terminated the receivership with a distribution made to priority creditors.|