Conflicts One Trend Discussed by Court Receiver, Lender on Mar 24th

The Bay Area Chapter of the California Receivers Forum held its March 24, 2010 program on trends in receivership that included a lender, court receiver and attorney on the speakers panel. It was very well attended at The City Club in the Financial District of San Francisco. The event which was entitled “Current Trends in Receivership and What to Expect in 2011” featured several current topics including:Court Receiver a) What kinds of challenges will a lender or receiver face in 2011? b) How are Bay Area courts approaching receiverships? c) Effect of third parties on receiverships d) Current issues concerning sales through receivership. THe panelists included Mia S. Blackler with Buchalter Nemer and an attorney who represents lenders during receiverships. Mark St. Pierre, Senior Credit Officer with JPMorgan Chase Bank in Stockton, California was the lender on the panel along with David Bradlow. Mr. Bradlow has had a management consulting practice since 1979 and is often appointed as a trustee, assignee for the benefit of creditor and has numerous assignments as a court receiver. One of the issues that received a lot of interest and discussion by the panel is on the conflict in hiring one’s own firm to manage the business or property. A member in the audience, who is both an attorney and receiver, believes this will cause an ethical conflict because the firm if owned by the receiver will not act in the best interests of the receivership. However, Mark St. Pierre, the lender on the panel, said he believes it is more cost efficient, there is better control and the fees are less if the receiver does both. In addition to the conflict issue, the types of businesses and real estate that dominated, such as multi-family, was also addressed. However, what was noticeably absent in the talk was a hotel receivership in the speaker comments. Are you are a law firm who provides legal services for receiverships or a bank’s counsel that is considering this alternative as a solution prior to foreclosure? If so, what issues are you concerned about as to the functions, duties and outcome by having a court receiver appointed to oversee the business or estate??