In certain instances, and due to many factors, it is not uncommon for the courts to appoint a Receiver to step in between the borrower and lender to manage a commercial property as a receiver.

This includes the hiring a professional property management team, brokerage and marketing team, and performing the actions usually performed by an asset manager or owner. The Receiver is responsible for positioning a property for disposition, or to stabilize a property during a process of litigation. This decision is becoming more common in some markets.

Lynda Gibbons of Gibbons-White, Inc. has acted as a court appointed receiver for commercial assets in the Denver Regional Area over many years.

Receivers are typically appointed by the court as a ‘neutral fiduciary’ or recommended by the lender as plaintiff. Receiverships can be done on a state or federal level. The Receivers duty is to control assets, businesses and other real properties involved in litigation in order to preserve them during the pending outcome of said litigation.

Specific court language refers to a ‘receiver’ as the hands and eyes of the court, thereby carrying out any necessary actions to preserve the assets of the receivership estate. The Receiver is not a representative or agent for the party owning these assets or the plaintiff, who is typically the lender; but rather, a Receiver is granted powers as an officer of the court to benefit all parties involved in the litigation.

Courts may ask the Receiver as a neutral fiduciary to research past accounting records, discover and search for hidden assets or conduct forensic accounting searches.

Receivers are typically compensated on an hourly fee plus expense basis, or an agreed upon flat fee paid monthly. Appointing a Receiver can be exceedingly beneficial to the stabilization of the property during what could be a time of confusion and uncertainty, wherein the property could slide into a position of bad reputation in the marketplace and one of sliding profitability.