Preserving or Selling Property in the Foreclosure Process

What does the receivership process encompass?

Receiverships, a legal remedy in the context of Florida law, involve court-appointed individuals or entities that take control of and manage property or businesses to protect the interests of various parties. For example, the court typically appoints a receiver when a company is insolvent or in fraud, mismanagement, or waste cases.

Receiverships protect the interests of creditors, shareholders, and other stakeholders, ensuring proper management and disposition of the property or business. Courts evaluate requests for receiverships by considering factors like the likelihood of irreparable harm, inadequate remedies at law, and the balance of hardships between the parties.

Need a receivership advocate? Schedule your consultation today with a top receivership attorney.

Which laws, rules, and regulations apply to receiverships?

Florida receiverships follow state and federal laws, regulations, and court decisions. At the state level, Florida Rules of Civil Procedure Rule 1.620 lays out the procedural requirements for the appointment of a receiver. Additionally, the Florida Statutes provide a framework for the selection and powers of receivers in various contexts, including the following legal situations:

• Corporate dissolutions;
• L.C. dissolutions;
• Enforcement of a judgment; and
• Mortgage foreclosures.

In addition to state law, federal statutes and regulations, such as the Bankruptcy Code and the Federal Rules of Civil Procedure Rule 66, can also apply to receiverships in certain circumstances.

Moreover, case law from Florida and federal courts further and continuously shapes the receivership landscape, guiding receivers’ appointments, powers, and duties in specific factual scenarios.

How does preserving or selling property in the foreclosure process connect to the receivership process?

Preserving or selling property in (and out of) the foreclosure process is a critical aspect of receivership cases in Florida and federal law. Under Florida law, a court-appointed receiver is responsible for managing and safeguarding the assets of the debtor or property owner. Their responsibilities include taking necessary steps to preserve, manage, or sell the property, depending on the circumstances.

How can poor receivership management lead to risk exposure?

The following issues related to receiverships commonly lead to litigation:

• Breach of fiduciary duty: Receivers must act in the best interests of the parties involved, and failure to do so can result in legal liability.
• Improper asset management: Receivers must manage the property or business effectively to preserve its value. Inadequate or negligent management can lead to legal risks.
• Violations of statutory or regulatory requirements: Receivers must comply with all applicable federal and state laws and regulations. Non-compliance may expose them to legal consequences.
• Conflicts of interest: Receivers must avoid conflicts that could compromise their impartiality or adversely affect the receivership process.
• Improper disposition of assets: Receivers must ensure that they conduct the sale, distribution, or transfer of assets appropriately and fairly. Failure to do so may result in legal liability.
• Fraud or misrepresentation: Receivers who engage in fraudulent activities or make misrepresentations during the receivership process can face legal consequences.

When a set of facts is appropriate for legal advocacy or intervention, there are many paths a claimant may take. We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path to seek appropriate remedies.

To determine whether your unique situation may necessitate litigation or another form of specialized advocacy, please contact our office to set up your initial consultation.

What measures should legal counsel take to preserve or sell property in foreclosure, and how do clients benefit strategically?

Counsel should consider the following to protect their clients:

• Familiarize themselves with relevant laws and regulations: Counsel must understand Florida and federal receivership statutes and applicable foreclosure laws and regulations to provide effective advice.
• Coordinate with the court-appointed receiver: Cooperation and communication with the receiver are essential for protecting the client’s interests.
• Negotiate with lenders and creditors: Counsel should proactively engage in negotiations to reach favorable outcomes for clients, potentially including loan modifications or short sales.
• Monitor the foreclosure process: Keeping track of deadlines and procedural requirements helps ensure compliance and avoid additional liabilities.

Strategic benefits for clients include:

• Protecting their interests: Effective legal counsel can help clients preserve or maximize the value of their assets during the receivership process.
• Navigating complex legal issues: Experienced attorneys can guide clients through the often-confusing maze of receivership and foreclosure laws.
• Minimizing liabilities: Proper legal representation can help clients avoid or mitigate potential losses and liabilities.

Please contact our office to schedule your initial consultation and determine what legal advocacy and protection may be available for your unique situation.

Frequently Asked Questions

1. How is a receiver appointed in Florida and federal receivership cases?

In Florida, a receiver may be appointed under Chapter 727 of the Florida Statutes, while federally, receivers are appointed under 28 U.S.C. § 754. In both cases, a court appoints the receiver, often based on the recommendation of one or more interested parties, such as creditors.

2. Can a property owner challenge the appointment of a receiver?

Yes, property owners may contest the appointment of a receiver by filing an appropriate motion or objection with the court, presenting their arguments against the appointment.

3. What happens to the property after the receivership process finishes?

Upon completion of the receivership process, the property may be sold, returned to the owner, or distributed to creditors, depending on the outcome of the case and the court’s orders.

Have more questions about receiverships?

Crucially, this overview of preserving or selling property in the foreclosure process does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances.

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively.

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain tireless advocates at every step. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant.

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to schedule a consultation.