Posted in: Bi-Weekly Receivership Education, Construction Project Receiverships

Using Receiverships to Revitalize Abandoned Construction Projects

What happens when a construction project runs out of money and the half finished skyscraper, mall, or hotel sits vacant for years?  There are two things that can happen; (1)  while everyone waits until the developer finds funds, which is unlikely; or, (2) a more practical solution is that a developer or other party with a recorded interest can seek the appointment

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Posted in: Bi-Weekly Receivership Education, Lien Stripping

LIEN STRIPPING WHY DOES IT OCCUR AND HOW DOES IT WORK?

Few people are familiar with the term lien stripping. Therefore, an example to illustrate when lien stripping would be used seems the most appropriate way to introduce the process. As an example, if in 2010 a set of parents drafted a granting $1,000,000 to their four children upon their deaths each child would be entitled to $250,000. However, what if when the

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Posted in: Bi-Weekly Receivership Education, Environmental Receiverships

Using Receiverships to Help a Lender on a Distressed Environmental Asset Avoid Liability

Secured lenders are hesitant to foreclose when environmental problems exist, based on concerns about CEQA, CERCLA, or other environmental issues, because they may be deemed an owner or operator. However, lenders can avoid these concerns by seeking the appointment of a receiver for the distressed property. California Civil Procedure (“CCP”) § 2929.5 & 564(c) authorizes lenders to inspect property to assess the

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Posted in: BARG Receivership Law Updates

LIEN STRIPPING: WHY DOES IT OCCUR AND HOW DOES IT WORK?

Few people are familiar with the term lien stripping.  Therefore, an example of when lien stripping would be utilized can be illustrated through the following example of insufficient equity.  If in 2010, a set of parents drafted a will granting $1,000,000 to their four children upon their deaths, each child would be entitled to $250,000.  However, what if when the parents died

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Posted in: Trust and Estates Receiverships

Trusts and Estates Receiverships

The intersection of trusts, wills and other estate documents and receiverships is a common occurrence. For example, a common reason that health and safety receiverships occur is that an owner passes away without any known heirs, or intestate. In situations where an owner passes away without any known heirs or intestate the property becomes abandoned and overrun, which makes the appointment of

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Posted in: BARG Receivership Law Updates

USING RECEIVERSHIPS TO HELP LENDERS AVOID LIABILITY ON DISTRESSED ENVIRONMENTAL ASSETS

Secured lenders are hesitant to foreclose when environmental problems exist, based on concerns about CEQA, CERCLA, or other environmental issues, because they may be deemed an owner or operator.  However, lenders can avoid these concerns by seeking the appointment of a receiver for the distressed property.  California Civil Procedure (“CCP) §  2929.5 & 564(c) authorizes lenders to inspect property to assess the

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Posted in: Criminal Receiverships

Criminal Receiverships

Another way to utilize the receivership remedy is to preserve property that is involved in criminal activity and pay restitution to the victims of the criminal activity. Often if a person is arrested and incarcerated the question becomes what happens to their assets? A recent example of when a receiver was sought is in a criminal case is when Bernie Madoff was

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Posted in: Post-Judgment Receiverships

Post-Judgment Receiverships

Receivers can also be used to enforce or effectuate a judgement. There are a number of ways this can arise. For example, in the City of Elk Grove there was a property that was the site of substantial criminal activity, but the code violations were not sufficient for a Health and Safety Receivership. The Property was the site of substantial criminal activity

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Posted in: BARG Receivership Law Updates

Federal Bankruptcy is Not an Option for State Legal Cannabis Business so What Should They Do When They are Failing Financially? Appoint a Receiver

At this time, thirty-three states have legalized marijuana. ( Esquire Link )  However, marijuana remains illegal federally.  21 U.S.C. §§ 801-890 (1970.)  As a result of marijuana’s status as a controlled substance federally, numerous bankruptcy courts have flatly banned state legal marijuana growers from seeking federal bankruptcy protection.  In re Rent-Rite Super Kegs W. Ltd. (Bankr.D.Colo. 2012) 484 B.R. 799, 809.  There was some hope that

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Posted in: Rents and Profits Receiverships

Rents and Profits Receiverships

Another way the receivership remedy is utilized is through rents and profit receiverships. A rents and profits receivership is typically used when a bank seeks to foreclose, but the property is worth less than the debt it secures. When the property is underwater a rents and profits receiver can be appointed to preserve the property and collect rents if necessary. A rents

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