When you need to select a court appointed receiver, you likely have many concerns. You want someone who will manage a property efficiently and ethically. In the meantime, you also need to ensure the person understands the industry well enough to respond to market pressures and influences. The receiver will function in the short term, but you likely want him or her to set up the property for long-term success. Given the multitude of factors involved, you should take time to investigate and vet candidates to ensure you get the right person for the job.
Experience in Asset Management
Creditors in position to select a court appointed receiver often look first for someone who can maintain or improve the value of the property in question. A primary factor for you may be the extent of the prospective receiver‘s experience managing assets in general. This can include someone who has managed property as a general manager or as an investor. It may mean investigating investments or managed assets to determine how their value has grown or diminished under the candidate’s stewardship. Preserving value, for a creditor, usually functions as the primary motivation. Reviewing asset management experience will give you insights into how, and how well, a prospective receiver has done this in the past.
Experience in Your Industry
Managing assets can require different skills in different industries. The court appointed receiver you ultimately select should often have experience that fits closely with the property at issue for you. Managing a store and managing a restaurant involve similar skill sets, but industry differences may play a large role in the specifics of what the receiver needs to do on a daily basis. Furthermore, your property may involve local nuances that an industry-specific expert can understand and respond to more effectively than a general asset management expert can do.
This may become more important the longer a receivership needs to be in place. As asset preservation yields to asset management and growth, an industry expert can provide even more value. If you need to get the greatest return from a property in receivership over time, you may find that experience managing property of the same type as yours becomes critical to long-term success.
Watch Out for Conflicts
When you look for someone with asset management experience in your industry, though, you may need to keep a keen eye on potential conflicts of interest. Your prospective receiver may have experience working with or for a competitor to the company whose property you want him or her to manage as a court appointed receiver. This may not automatically disqualify the person, but you should look further into what relationships may exist, including any agreements that may be in place between the prospective receiver and your competitors.
Beyond overt conflicts, you may also want to look out for conflicts that arise through stock ownership or other financial incentives. Sometimes this kind of ownership interest can create reasons not to manage as competitively as necessary to maximize the value of the property in receivership. While these competing interests do not always make a person less invested in doing the best work possible on your behalf, you are usually safer selecting someone who has no such conflicts in place.
Do Your Homework
Entrusting management of a property in receivership should come with caution. Take the time to carefully vet each prospective court appointed receiver before making a decision. The time and effort can make a big difference in the enduring value of the property.
