A business receivership in Newport Beach California can be an alternative to a business bankruptcy as a method of liquidating the assets of a business in order to pay certain types of creditors. A business receivership cannot occur unless there has been an adversarial legal proceeding and the court has determined that a receivership is necessary and proper. If your business is at risk of falling into a business receivership in Newport Beach California, an experienced business attorney can advise you on the best action you can take to protect your business assets.
Business receiverships may be appointed for the following reasons:
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- Insolvency
- Loan Default
- Disputes between stock holders
When a business falls into receivership, a receiver is appointed by the court to take possession and control of certain assets or property in order to administer them in accordance with the court’s order. Usually a business’ secured creditors with a security agreement that includes the right to file for receivership are the ones to petition the court for a business receivership. The entity requesting the business receivership is ultimately responsible for the expenses related to the appointment of a receiver.
If your business is at risk of falling into business receivership, there may be some actions you can take. You may argue that a receivership is a drastic remedy that will cause irreparable harm to your business. Or you could file for Chapter 11 bankruptcy to maintain control of your business. You will need to consult with an experienced business attorney to find out what options are available and appropriate for your business.