Receivership

The Receivership Practice Group focuses on business insolvency and creditors’ rights in state court receivership proceedings in Rhode Island and Massachusetts.  Our attorneys and paralegals are well versed in the complexities and intricacies of the insolvency laws.  Three of the firm’s partners, Stephen J. Shechtman, Jonathan N. Savage, and Stephen F. DelSesto, are regularly appointed by the state courts to act as Receivers for businesses in distress.  Our practical business experience, combined with necessary legal expertise, enables the firm to service the diverse needs of our business clients in insolvency proceedings of entities ranging from multi-million dollar companies with national distribution channels to closely held local businesses.  We regularly counsel our creditor clients in receivership proceedings with regard to debt restructuring, as well as the collection and enforcement of secured and unsecured obligations. 

The firm has a proven record of success when its attorneys have been chosen to serve as court-appointed receivers.  Acting as a receiver and charged with assuming control of struggling businesses, marshaling their assets, and operating the entities as going concerns (or liquidating the business), our attorneys have succeeded in maximizing recoveries for creditors and equity holders.  Our attorneys have repeatedly brought creative solutions to the myriad of legal, financial, and business issues that arise during the operation and disposition of a business in distress. 

When serving as court-appointed receiver, our attorneys have been particularly successful in stabilizing and rehabilitating struggling businesses, preserving and often enhancing their value, and ultimately selling them as going concerns.  We frequently achieve outcomes that benefit not only the business itself, but also its employees, whose jobs remain intact, and its creditors and equity owners, who have a greater likelihood of recovery on their claims.  Some recent examples of our successes are:

--A large construction company, in which we managed the assets of the debtor/contractor that specialized in “big box” retail construction projects throughout New England and metropolitan New York.  This matter required an immediate and extensive forensic review of numerous construction projects left in various stages of completion.  We successfully negotiated substantial payments to creditors and the receivership estate, which resulted in a $10 million dollar reduction of an over $18 million dollar claim pool.  Our analysis, negotiations, and efforts provided most creditors with distributions in excess of 70% of the value of their claims, and in some instances a 100% recovery.

--A local jewelry manufacturer, in which we operated and sold a well-known Rhode Island jewelry manufacturing company resulting in the saving of jobs, the preservation of an iconic local business, and a sizeable distribution to general creditors of the company.

--A Massachusetts Realty Company, in which we operated and ultimately sold a large industrial property located in Fall River, Massachusetts to a developer for in excess of $1 million.  The assets of the receivership estate consisted primarily of a historical mill complex with many challenging site conditions.

In addition to serving as receiver, the firm frequently represents struggling companies which may be exploring the possibility of being petitioned into receivership.  In many instances, we have been able to assist clients in averting receivership or bankruptcy by restructuring the company and/or its debt structure or by introducing our clients to investors willing to infuse new capital or extend additional credit.  When receivership is the appropriate alternative, we counsel our clients and assist them in gaining a full understanding of the receivership process.