Tips from a Nightclub Security Expert on Bar Patron Safety
Measure Twice, Cut Once As with all receiverships, it is especially critical for a Court Appointed Receiver in a limited-purpose capacity to have everything clearly defined and spelled out in the initial court order granting authority to appoint a Receiver. It is also best for the respective city or county legal counsel, who will be petitioning the court with such an order, that they talk with the proposed Receiver first. The Receiver can then describe specific instructions and authority required to be in the hotel receivership order for the Court Appointed Receiver to carry out his or her duties. One of the key issues concerning a Court Appointed Receiver’s ability to take control of all bank accounts is to understand where those monies flow from the respective hotel revenue deposits and on-site property management systems. It is equally important that the Court Appointed Receiver will be the sole signatory on these same bank accounts or future conflicts with the owner and bank accounts may arise. Oceanfron ResortIt is also important to identify and specify what the individual deposits consist of that will be controlled by the Court Appointed Receiver and in what form it flows within the hotel’s operation. These deposits could be in the form of cash, credit cards, guest advance deposits and gift certificate payments. There are other areas concerning the daily deposits that are often overlooked and where the Court Appointed Receiver should also gain control as part of the order, such as the accounts receivables (A/R), which includes company and group billings and set asides for FF&E (fixtures, furnishings and equipment) reserves, which are often required by a lender or franchisor. In airport hotels that house several airline crew contracts, or major convention center hotels with many group meeting accounts, this can easily amount to a large sum of funds. In the event the owner loses the hotel to one of its other creditors or incurs some other judgment, the Court Appointed Receiver will still retain control of these accounts. This will enable the Court Appointed Receiver to continue A/R collections as part of the hotel receivership where those monies can still be recovered and used toward satisfying the city or county hotel TOT judgment. To be continued – See Part 3…
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