How to plan for receivership in business bankruptcy

Sometimes, a business’s liabilities end up outweighing its assets, thus driving the business owner to file for bankruptcy protection. An important role that you may seek to assume during a company’s Chapter 11 bankruptcy process is that of a receiver, or a trustee. Here is a glimpse at what the receivership process involves during a business bankruptcy in Massachusetts.

Receivership is where a receiver who is legally appointed during a business bankruptcy serves as the custodian of the company’s business operations or assets. A governing body, creditor or bankruptcy court may appoint you to be the receiver. As the receiver, you have full discretion regarding how to handle the business assets you receive, with the goal of helping the company to experience financial recovery.

The receivership process offers a struggling business the chance to restructure the company and thus avoid liquidation. The goal of this process is to help the company to return to a state of profitability, thereby avoiding bankruptcy. Otherwise, the company must sell its assets — or undergo liquidation — after which, it will no longer exist. An attorney in Massachusetts can walk you through the process of becoming a receiver during a business bankruptcy.

With a hundred years of service to local businesses, we understand both sides of the bankruptcy process. Since 1918, the attorneys of Seder & Chandler have excelled at facing complicated and fast-moving legal issues, from complex corporate law, commercial real estate law, estate planning, to acting as counsel for law matters business and personal. Contact us today to learn how our combination of traditional commitments and adaptivity has given us a legacy of a 100 years.