Every case is analyzed to ensure that the best resources are used for each project and costs are kept to a minimum. This business philosophy has earned Integrated Receivership the respect of its clients and industry professionals.
Appointments We Handle
Residential Real Estate
Commercial Real Estate
Businesses and Corporations
Partnership and Corporate Dissolution
Construction Projects
Estate Liquidations
Portfolio Liquidations
Enforcements of Judgments
Our Clients Are
lending institutions
attorneys
corporations
partnerships
private investors
mediators
government agencies.
At Integrated Receivership, we also assist lending institutions in liquidating their property portfolios.
Receivership - A typical appointment:
Having borrowed against a business plan that has not worked, a company finds that it is suffering cashflow problems. In an effort to survive, the company reports its problems to the bank and the bank asks for more information on the problems the company faces. Struggling with the problems, the directors find it difficult to produce the information. Often the accountancy and reporting systems are not robust and a lot of time is needed to work out where the company is going, what the depth of the problems is and the necessary reporting to the bank is delayed.
As time goes by, the company's overdraft is constantly at its limit, because monies don't come in fast enough from customers. Clearly this should set alarm bells ringing at the company - it most certainly does at the bank. They call this ceiling borrowing, and take it as a sign that the directors are losing control. When this happens the bank will review the account and will typically take some or all of the following steps below (see What the bank will do).
What the Bank will do
- The bank will ask for a reduction in its exposure.
- It will ask for increased security from the directors or shareholders. Usually this takes the form of personal guarantees to support the security that the company has given through the debenture.
- It may ask for new capital to be introduced by the shareholders. Problem is though, occasionally, this only has the effect of reducing the bank exposure as the bank takes this cash to reduce the borrowing.
- It can ask for a new business plan from the directors, along with regular reporting.
- It may ask for the company to consider receivables finance (factoring) to remove its borrowing and move to a factor. Often the bank's own factoring company.
- If they are still not satisfied that the directors are in control and if the bank is concerned about its exposure it will ask for investigating accountants (or reporting accountants) to look at the business. Normally this is a large firm of accountants who send an insolvency practitioner (IP) into the business to ascertain
- Is the business viable?
- Is the company stable?
- Does it have a long term future if the present difficulties can be overcome?
- Is the bank's exposure sufficiently covered in the event of a failure?
- In this report the IP calculates what the assets of the business are worth on a going-concern basis and in a forced sale scenario (or closure basis).
- Investigating accountants often recommend that the bank sticks with the business, but that the bank should limit any further borrowing to the fully secured variety - in other words the directors must secure it personally against property for example.
- If the IP thinks that the company is in serious risk of failure and that the banks may lose money in that event, he/she will usually recommend to the bank that they appoint a receiver.
Usually the bank will requires the directors to "request the bank to appoint a receiver".
This is face-saving, and designed to deflect criticism from the bank to the directors.