Receivership and Business Insolvency
Shechtman Halperin Savage, LLP’s Receivership Practice Group focuses on business insolvency and creditor’s rights in receivership proceedings in Rhode Island and Massachusetts, and works with lenders and struggling companies to understand the advantages and/or disadvantages of receivership and bankruptcy proceedings. Our expertise in the complexities of insolvency law, together with our practical business experience, enables us to meet the challenges of receivership and insolvency proceedings, whether related to multi-million dollar companies with national distribution channels or small, closely held local businesses.
Expert Advice: We regularly counsel creditors, lenders, business owners, principals, and shareholders in receivership and insolvency proceedings. In particular, we offer guidance with regard to debt restructuring, as well as the collection and enforcement of secured and unsecured obligations. Throughout our representation, we use our talent, creativity, business acumen, and legal expertise to protect our clients’ investments/assets and maximize their recovery.
SHS also frequently represents struggling companies contemplating their own potential receivership. In many instances, we have been able to help our clients avert receivership or bankruptcy by restructuring the company and/or its debt, or by introducing our clients to investors willing to infuse new capital or extend additional credit. When receivership is the appropriate alternative, we provide our clients with counsel and support and ensure that they have a full understanding of the receivership process and how it affects their business, their creditors, clients, vendors, and employees.
Receivers/Special Masters: Jonathan N. Savage, Preston W. Halperin, and Christopher J. Fragomeni are regularly appointed by the Courts in Rhode Island and Massachusetts to act as receivers for businesses in distress, and/or as counsel to the receiver. Our attorneys take very seriously their charge as Receiver, to assume control of struggling business, marshal existing assets, and either liquidate or operate these entities as salable going concerns. Our exceptional staff seeks out and delivers creative solutions to the myriad of legal, financial, and business issues that arise during the operation, winding-up, and disposition of a business.
As court-appointed Receivers/Special Masters, we have seen great success in maximizing recoveries for creditors and equity holders. We work diligently to stabilize and rehabilitate businesses, preserving and often enhancing their value so that we can ultimately sell them as going concerns. Our focus on increasing value benefits the business and its employees — whose jobs remain intact — together with its creditors and equity owners, who have a greater likelihood of recovery on their claims.
Shareholder Oppression, Freeze Out, Buy-Out, Business Valuation: Unfortunately, closely held and/or family owned and operated businesses frequently confront issues with regard to the balance of power, termination of family members from employment, infighting, hiding or shifting of assets, or freezing out certain shareholders from the running of the business. Often, there are disputes as to the value of the business and its assets. Our team of professionals are able to assess the situation, evaluate the risks versus rewards of a potential receivership proceeding, determine the need for appraisals or business valuations, analyze the business climate and how it may affect the client’s company, and offer unparalleled legal and business guidance and advice throughout this entire process.
Sampling of our Successes
SHS managed the assets of a debtor/contractor attached to a large construction company specializing in “big box” retail construction projects throughout New England and metropolitan New York. We completed an immediate and extensive forensic review of numerous construction projects left in various stages of completion, successfully negotiated substantial payments to creditors and the receivership estate, and succeeded in obtaining a $10 million dollar reduction of an over $18 million dollar claim pool. Our efforts provided most creditors with distributions between 70% and 100% of the value of their claims.
SHS operated and sold a well-known Rhode Island jewelry manufacturing company. Through our efforts, we were able to help save jobs, preserve an iconic local business, and create a sizable distribution to company creditors.
SHS managed a receivership estate in Fall River, Massachusetts, consisting primarily of a historical mill complex rife with challenging site conditions and environmental issues. We operated this large industrial property and ultimately sold it to a developer for a sum in excess of $1 million.
SHS successfully operated and sold the assets of Landmark Medical Center, a not-for-profit, 214-bed acute care hospital providing emergency, diagnostic, medical, surgical, psychiatric, cancer, cardiac and obstetric care located in Woonsocket, Rhode Island. SHS attorneys obtained approval for the sale from the Court and State regulators, which allowed Landmark to continue to provide quality care to patients in Northern Rhode Island and surrounding areas, as well as preserve much needed jobs in the State of Rhode Island.