Pick the Right Receiver

One thing I’ve noticed recently about receiverships is the number of receivers getting appointed for the wrong reasons. That is not to say that many receivers are not qualified business people – I actually believe that a good many, if not most of them, are.

However, the key to a good receivership is finding the right receiver for the right business, and not just a receiver with business experience.

This may seem obvious, but frequently a less-than-appropriate receiver is selected because of the nuance of my point. Allow me to elaborate.

For an operating business you need a crisis manager who knows how to hold the operations together and to create value.

On income producing property you need a receiver who understands property management and who has experience with the particular type of property e.g. strip center, apartments, vacant land, office complex.

When there is an inadequate match between the receiver and the business it diminishes the results and the return on the bank’s investment.

Because the lender will typically fund a receivership and the associated fees, it’s particularly important that the receiver chosen be the right – and most qualified – one. Though a chosen receiver may have been successful elsewhere s/he needs to be the perfect match in order to optimize the chances of success and the bank getting a proper return.

When the alligators are biting, there isn’t time to give the receivership to just anybody. A receiver needs to know what he’s doing in the environment of the business in order to successfully complete the receivership, whether by selling the property or turning the business around.

What are your experiences with the wrong people in the right jobs?

Cooking the Books & Other Stuff I’ve Seen Lately

You wouldn’t believe what some people do. Well, I’m sure you would, but I’ve got to say that I’ve been seeing some crazy stuff these days.

In one case I’m working on, the guy “running the show” has been stealing everything but the robe off his cold grandmother.

Every time I think I’ve seen every possible type of fraud there is, I’m introduced to a new one.

So far due to the actions of one crooked CEO I’ve seen and experienced the following:

~ Cooked Books

~ 6 Million Stolen Dollars

~ A self dealing CEO setting up a new business and paying old vendors for support

~ Getting my access cut off internally despite my appointment by a court of law to be doing what I’m doing

~ Offloading merchandise that had “no value” and was therefore disappearing

~ Selling one company’s products through another company and brand, which is detrimental to the value of the original company

~ Literally, taking the cash from sales – taking the cash, like a petty thief!

~ Plans to remove computers and file cabinets to “preserve” records for tax purposes.

~ Destruction of papers and documents

Holy cow!

I can’t believe all that this crooked guy is doing. I’ve seen a ton of fraud in my day, but one person doing so many different things. If he put this much effort into running the business effectively he would surely be making as much. It’s just craziness!

Have you been at a job and experienced fraud? Share your story in the comments below.