Learn Law For All

The Role of Receivers in Asset Management and Legal Proceedings

• Launi Sheldon and Guests

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Unlock the secrets of receiverships with the guidance of Beth Jo Zeitzer, our distinguished guest with an impressive repertoire as both a licensed attorney and real estate broker. Together, we'll navigate the nuanced responsibilities of a receiver and demystify the vital role they play as a court-appointed fiduciary in asset management. Focusing on real estate and income-producing properties, Beth Jo brings clarity to the process, emphasizing the importance of thorough court reporting and steadfast transparency. Prepare to delve into the unique intersection of legal acumen and property expertise, as we dissect the significant impact of receivership in divorce proceedings and beyond, with Beth Jo's wisdom lighting the way.

Listeners seeking a deeper understanding of the complex world of legal receiverships will find Beth Jo Zeitzer's insights invaluable, particularly when dealing with the fair distribution of assets amidst marital dissolution. Reflecting on her extensive experience, she highlights the necessity of appointing receivers with the right skill set tailored to the asset at hand. Through vivid real-life examples, such as hotel management, Beth Jo illustrates the multifaceted applications of receiverships, offering a beacon of knowledge to those grappling with these intricate legal matters. For those inspired by our discussion, Beth Jo's contact information is an open invitation to continue exploring the intricacies of this specialized field, ensuring that your next step in legal asset management is grounded in expert advice.\

You can contact Beth Jo Zeitzer at:
https://roiproperties.com/

You can contact Launi Sheldon at:
Launi@LearnLawForAll.com

Speaker 1:

Hi, I'm Lonnie Sheldon with LearnLaw4ALL and today we have Beth Jo Zeitzer and today Beth Jo is going to be talking to us about receiverships. But a little bit about Beth Jo is she's the CEO and designated broker of ROI properties and the owner of ROI asset management solutions. Roi properties is a full service real estate brokerage firm which works with fiduciaries, trustees, property owners, business owners, investors and lenders regarding valuation, marketing and sale of commercial, residential and land assets. So, in addition to serving as a real estate broker, beth Jo is appointed by numerous courts as a receiver, real estate special commissioner, special master, bankruptcy trustee and expert witness in real estate matters and legal proceedings. Beth Jo is a licensed attorney in Arizona and California, as well as licensed real estate broker in Arizona. She was named one of the 50 most influential women in Arizona business by Arizona Business Magazine. She's the past president of AZ Crew, arizona Commercial Real Estate for Women. Past president of TMA, which is turnaround management association board. Member of the Maricopa County Bar Association. Elected to the executive council for real property and alternative dispute resolution sections of the Arizona State Bar of Arizona. I guess that makes sense. She's been a member of the Arizona fiduciaries association, so she's got a lot of more stuff down there. She's brilliant and, beth Jo, thank you so much for being here with me today. I really appreciate you spending your time to talk to us about receiverships.

Speaker 1:

I do real quick, want to do a quick disclaimer. As you know and but I say this about every time this podcast is meant for educational purposes only and in no way should be considered legal or real estate advice. Watching the video does not create an attorney-client relationship with me or with Beth Jo, or a real realtor-client relationship with either me or Beth Jo, or a broker-client relationship. So Beth Jo is licensed realtor and attorney in Arizona and California. I'm licensed realtor and attorney only in Arizona, although we've discussed we will be discussing Arizona law specifically. This is more of the concept and can be useful for other jurisdictions, but always check the laws in your jurisdictions and speak with an attorney in your jurisdiction. So, thank you. I just had to get that out of there, beth Jo. So thank you so much for waiting patiently while I did that. So I do have some great questions for you. We did just record a CLE, which will be available at the same time. This is so it should be up and available, but let's talk about it. What is a receivership?

Speaker 2:

So a receivership is basically the appointment of a receiver to basically manage assets. They could be assets related to an operating business. In my case, typically I'm doing assets that are specifically related to real estate and, even more specific than that, income producing properties, and that's kind of what the income and expense side is what gives rise to really the need for a receivership appointment. And the receiver is appointed as a fiduciary by the court system and our client is really the court. We are not reporting to either any of the parties involved. We're reporting to all of the parties on an equal basis and, most importantly, the court. We file our reports with courts who they're publicly available.

Speaker 1:

So when would the appointment of a receiver be most relevant or helpful during a divorce?

Speaker 2:

I think in family law matters, where we see an appointment as most needed is where we have one spouse who is the operating partner for the business or the assets and may not be sharing information with the other spouse, maybe in a position of power and either not sharing information, not sharing income or income going to third parties without actually making it into the community estate. The husband or wife suspects that there is some malfeasance, things that are happening that should not be happening and they need more information, particularly in a divorce proceeding where they're looking to divide up assets. So an appointment of a receiver would be very, very critical in situations where you have assets that are going to questionable sources or not, information is not available, assets that have been potentially drained and you're looking to do some form of a accounting study, to be a forensic accounting study, to be in a position where you understand the flow of the monies and resources for the receivership estate. So those are instances where I think an appointment of a receiver can be very, very helpful. We've done some in divorce cases related to, let's say, ownership.

Speaker 2:

Community estate owns hotels okay, owns and operates hotels and husband decides that some of those hotel operations he actually wants to divert income to a third party, maybe a girlfriend or some other party and all of a sudden wife is realizing that not all of the funds are making it back into their community estate.

Speaker 2:

She may not be in a position of power to even have access to bank accounts or otherwise. Divorce proceeds and wife recognizes, perhaps, her position and feels the need to better understand, in a more comprehensive way, the assets of the estate. So a receiver, in that case, was appointed. I was appointed as receiver to go in and operate the hotels and then produce reports with respect to income and expense information. And then in that instance we did not sell those hotels within the receivership estate and instead we divvied them up between the parties. But the parties were in a position where they had all of the income and expense information and they had the valuation information that we had provided and we obtained through the receivership, and so they were able to make more intelligent decisions about these kind of a way to terminate the community estate.

Speaker 1:

Well, that's a lot of work to take over some running some hotels. How do you determine who the right receiver would be in a case like that or other cases?

Speaker 2:

Typically you're going to look for a receiver that has some very specific experience operating in my situation, operating specific types of properties. So you want to make sure, if it's an apartment complex or multiple apartment complexes, that the receiver has operated apartment complexes and knows how to move through the property management piece as well as the reporting piece. Same deal with, let's say, shopping centers or special use facilities and schools and industrial buildings and otherwise. So typically our assignments again are real estate centric. But then there's plenty of receivers that are appointed on operating business assets and so you're going to want to look for someone that has some experience within that very specific operating business okay, not the actual business, but within the industry that that business is in. So that's where possibly executives that have served, let's say, in a CFO capacity for that very specific industry, whether it's making widgets, whether it's cannabis, whether it's heavy industrial equipment, whatever it might be but somebody that knows and understands the dynamics of that business and what it takes to run the business is going to be a great appointee as a receiver.

Speaker 2:

So typically you're going to look for that very specific experience, whether that's property specific as to asset class, but let's say the real estate side, or on the operating business side. You're really looking for a receiver that knows and understands, let's say, law firm operations for a law firm receivership, which unfortunately we are seeing some of those, or again, widgets or cannabis or heavy industrial equipment or whatever the industry might be. But having that very specific experience can be very helpful. And specifically, we usually see people that are in more of a legal role within those types of industries or that are in more of an accounting role, like a CFO type of position that would come in as a receiver or that would come in as an operator and operate through the receivership.

Speaker 1:

So how do you determine what your level of involvement and or your power are in that appointment?

Speaker 2:

So the court order that appoints us. So this is the order of receivership. It provides us with kind of our authority and very, very you want to be very, very specific in drafting that order and implementing that order so that those powers are very specifically stated in that order. If anything is missing from that order then we resort to statutory law, which in Arizona and many other states that have now adopted the Uniform Commercial Real Estate Receivership Act, which provides all kinds of protections for a lender or for a business operator or by statute. In Arizona there's a fairly old statutory scheme with some case law as well. But preferably you want to spend the time on the front end to draft a very, very specific order so that you don't have to rely upon case law or statutory interpretation for interpretation of missing pieces in the order.

Speaker 1:

Yeah, because we both know that when lawyers get ahold of that, we all have our opinions and are willing to argue for those opinions on what it's meant to say. Well, thank you so much for being here. We did do a podcast or a CLE earlier. She answers more of these questions in that CLE and there are attachments that we have which I think you were going to look for, maybe an order, and her Beth Joes contact information will be listed in the description, so if you have any questions, please feel free to reach out to her. She's really great and thank you so much for being here. I really appreciate your expertise in this area. Thank you, thank you, thank you.