Regulatory Receiverships Present Unknown Risks to Creditors
Recent article by Southern California law firm, McNamara Benjamin LLP discusses how creditors can avoid unknown risks that Regulatory Receiverships can present based on the assumption that all are created the same.
San Diego, CA, January 12, 2016 (Newswire.com) - Most creditors are familiar with standard, state court receiverships. These can arise when a secured creditor is foreclosing on a commercial property and seeks appointment of a receiver to manage the property and to collect rents and profits pending foreclosure. State court receiverships also can arise in business disputes, such as litigation arising from an irreconcilable conflict between business partners.
Creditors tend to be less familiar with regulatory receiverships. These are imposed at the request of regulatory agencies, such as the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), the Securities and Exchange Commission (SEC), or state counterparts. And, what creditors do not know can hurt them. This article highlights some key differences:
- Regulatory Receivers have broader mandates as to business operations.
- Regulatory Receivers have additional priorities.
- Regulatory Receivers have greater flexibility with assets.
- Regulatory Receivers are more likely to pursue claims against third parties.
- Regulatory Receivers may recommend and administer a claims process.
The lawyers of McNamara Benjamin LLP have served as receivers and counsel for receivers in well over twenty regulatory receiverships involving hundred of millions of dollars in claims and assets. Their lawyers have also represented secured and unsecured creditors in numerous other receiverships. Each receivership is unique, and their experience allows them to navigate the complex and uncertain circumstances that arise.