The coronavirus pandemic has flooded people’s minds with unquestionable doubts and uncertainty. For most, life and work have come to a complete and unexpected halt. The economy has plummeted, forcing countless businesses to temporarily close thus leaving numerous people out of work. For businesses lucky enough to keep their doors open are suffering at the hands of a reduced workload. The pandemic has caused, and continues to cause, distressed business owners and corporate shareholders to restructure and adapt to these challenging times. Big and small companies alike are trying to avert insolvency and utilize various relief options to mitigate the hardships. Unfortunately, we fear that we are still in the beginning stages of these struggles with no definite end in sight, and the somber truth is that while some companies will sustain, many others will not. For those that cannot, a Court-Appointed Receiver can help ease the difficult process of liquidating company assets and restructuring corporate frameworks.
California Code of Civil Procedure §564 allows a Receiver to be appointed by the court in circumstances where a corporation has been dissolved or is insolvent, or is in imminent danger of insolvency, or has forfeited its corporate rights. A Receiver is a neutral third party who takes possession and manages real property or corporate assets that are at issue. Under California Rules of Court Rule 3.1179, a Receiver holds the corporate assets “for the benefit of all who may have an interest in the receivership property.” A Receiver has the authority to receive rents, collect debts, make transfers, and carry out the orders of the court. A Receiver may also distribute the corporation’s income, assets, or other property among the shareholders of the corporation as approved by the court. A Receiver is particularly helpful in circumstances where one or more shareholders of a corporation do not agree on how to liquidate the corporate assets or how to move the company forward. When companies reach an impasse, a rapid termination and division of the company assets may be necessary, which makes the appointment of a Receiver a worthwhile option to consider.
Receiver Richardson “Red” Griswold has been appointed by California courts over 100 times across 13 counties to act as a Receiver for disputed and/or distressed real property and businesses assets. For more information, please contact Griswold Law, APC at (858) 481-1300 or [email protected].