receivers

beaufoy

Are receivers allowed to sell property(they are managing for a bank) cheaply to private individuals or shell companies set up to purchase said property

4ensic15

beaufoy wrote: »

Are receivers allowed to sell property(they are managing for a bank) cheaply to private individuals or shell companies set up to purchase said property

Receivers are supposed to secure the best price reasonably achievable and to avoid conflicts of interest.

Who is goint ton stop them doing otherwise?

Peregrinus

beaufoy wrote: »

Are receivers allowed to sell property(they are managing for a bank) cheaply to private individuals or shell companies set up to purchase said property

There is no objection to selling to private individuals, or to companies set up for the purposes of the transaction.

As 4ensic15 says, they are supposed to sell to best advantage, which basically means getting the best price they can, in order to pay off as much of the debt as possible, leaving the debtor on the hook for the lowest possible amount.

beaufoy

Peregrinus wrote: »

There is no objection to selling to private individuals, or to companies set up for the purposes of the transaction.

As 4ensic15 says, they are supposed to sell to best advantage, which basically means getting the best price they can, in order to pay off as much of the debt as possible, leaving the debtor on the hook for the lowest possible amount.

If they sell to an individual how can they prove they are getting the best price. It might well be possible to get a better price selling to an individual or shell company, but they cannot prove they are getting as much as they would have got at an auction. By selling at an auction the price achieved might be lower or higher but provided the auction has been marketed then it is provable that the best price has been achieved

Samuel T. Cogley

They have to take reasonable steps - I forget the proper legal test. They don't have to go all out. Auctions limit the customer base so may fetch a lower price than selling privately.

Robbo

beaufoy wrote: »

If they sell to an individual how can they prove they are getting the best price. It might well be possible to get a better price selling to an individual or shell company, but they cannot prove they are getting as much as they would have got at an auction. By selling at an auction the price achieved might be lower or higher but provided the auction has been marketed then it is provable that the best price has been achieved

It would be standard practice for a receiver to obtain at least one valuation prior to a sale. This may also include a recommendation on whether to sell by private treaty, auction etc.

Auctions are sometimes not the best means of a achieving a market value sale. There's be numerous incidents in recent years of auctions being disrupted by aggrieved parties, rent-a-crowds being brought in to intimidate bidders etc.

Gravelly

I had an experience a few years ago where a company that owed me a substantial sum of money went into receivership, while a legal action was pending by me and others to reclaim monies owed. Their assets were sold, for what seemed to be a substantial discount on market value, to a company controlled by one of their directors, and the profit realised from the sale went to pay the receiver. I have heard numerous stories since, from reliable people, of similar incidents. My impression is that the receivership system here is not quite as transparent as it should be.

Peregrinus

The receiver's duty is to the creditors, and in particular to the creditors who appointed him, who are first in line to be paid, because they have a security or charge over the assets of the company (which is why they get to appoint a receiver; the right to do so is one of the terms of the charge). In general, if they sell to less than best advantage, it's the creditor who appointed them who will suffer, and therefore there may be some consultation between the receiver and the appointing creditor about the optimal way to realise the company's assets.

Gravelly's situation is an unfortunate one, but it is commonly the case that the scale of a company's secured debts is such that it makes little difference whether the assets are sold at the highest and most optimistic valuation, or at something below that; either way, the unsecured creditors will get nothing. In these cases there's a premium to getting the receivership resolved quickly.

Gravelly

Peregrinus wrote: »

The receiver's duty is to the creditors, and in particular to the creditors who appointed him, who are first in line to be paid, because they have a security or charge over the assets of the company (which is why they get to appoint a receiver; the right to do so is one of the terms of the charge). In general, if they sell to less than best advantage, it's the creditor who appointed them who will suffer, and therefore there may be some consultation between the receiver and the appointing creditor about the optimal way to realise the company's assets.

Gravelly's situation is an unfortunate one, but it is commonly the case that the scale of a company's secured debts is such that it makes little difference whether the assets are sold at the highest and most optimistic valuation, or at something below that; either way, the unsecured creditors will get nothing. In these cases there's a premium to getting the receivership resolved quickly.

All true, the problem seems to arise when a company is in trouble and gets someone associated with a director/owner to call in the creditor, based on a charge on goods they have managed to secure. There is a well-known Irish entrepreneur who has a track record of doing this.

beaufoy

Gravelly wrote: »

I had an experience a few years ago where a company that owed me a substantial sum of money went into receivership, while a legal action was pending by me and others to reclaim monies owed. Their assets were sold, for what seemed to be a substantial discount on market value, to a company controlled by one of their directors, and the profit realised from the sale went to pay the receiver. I have heard numerous stories since, from reliable people, of similar incidents. My impression is that the receivership system here is not quite as transparent as it should be.

I explain what happened to me later, but what happened to you is very close to my experience

ohnonotgmail

Gravelly wrote: »

All true, the problem seems to arise when a company is in trouble and gets someone associated with a director/owner to call in the creditor, based on a charge on goods they have managed to secure. There is a well-known Irish entrepreneur who has a track record of doing this.

what benefit is that to the creditor?

Gravelly

ohnonotgmail wrote: »

what benefit is that to the creditor?

Sorry, that was meant to read receiver.

The benefit would be that the company director(s) buy the assets of their distressed company at a knock-down price, and start up again debt-free.

beaufoy

I will try to do this without another defamation case being brought against me. I own student apartments and a few years ago I attended an agm where myself and a receiver who controls 40 apartments voted to reject accounts that were submitted. The directors said they would call an EGM to be held at the student complex the next month. The next month arrived but no EGM date fixed, same applied for the next month. I sent several letters asking for EGM date then an e mail arrived saying it had already taken place, and a revised set of accounts had been approved. I contacted the 40 apartment receiver to see why he had not contacted me, but no answer. I contacted his boss who told me his junior who had worked with me to get the accounts rejected had left the company. It seems before he left he had a meeting with the directors of the OMC,and progress had been made. The boss of the receivers had now taken over the account and promised to contact me when he had news. I never received said contact but discovered very soon after he promised to contact me he sold the 40 receivership apartments to a company which was formed to buy the apartments. Said company described itself as resident in a non existant address in Dublin, but in fact had an address in Galway which it shares with other companies. I contacted the receiver and implied that the company that bought the apartments was a front for the directors of the OMC, and the receiver had knowingly sold receivership apartments at an extremely low price to directors of the OMC who were the cause of the apartments poor valuation ie conflict of interest....the boss of the receivership company was not happy with the implications i made

nuac

Mod
Pls appoint a solicitor to advise you on your various legal problems
Leaving this open for now for general discussion