Griswold Receivers

A deadlocked business has two possible remedies, and they aren't interchangeable.

A provisional director is a surgical remedy. Under California Corporations Code § 308, the court appoints a neutral third party to take part in board or member decisions where the principals are deadlocked, and that party steps back once the deadlock breaks while the business keeps operating and the principals stay in their roles.

A receiver is a comprehensive remedy. Under Code of Civil Procedure § 564, the court appoints a neutral party to take control of the entity, running operations, managing cash flow, reporting to the court, and making decisions the principals no longer control.

The practical question for attorneys is whether the problem is a single deadlock or a broader failure of governance. Matching the remedy to that answer protects as much of the operating business, and as many jobs, as the litigation allows.

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Appointment of Provisional Director A provisional director can evaluate complex business circumstances and make a decision that benefits all stakeholders as fairly as possible. 

An assignment order is a powerful tool for judgment creditors within post-judgment enforcement.

Under California Code of Civil Procedure § 708.510, a court can order the third party who owes the debtor money (rent from a tenant, distributions from an LLC, commissions from a broker, accounts receivable from a business) to pay the creditor or a court-appointed receiver instead.

When a post-judgment receiver is appointed, assignment orders become part of the receiver's toolkit for tracing and collecting income.

For creditors with a stalled judgment and a debtor with identifiable income streams, this conversation can turn a judgment on paper into money collected.

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Assignment Orders Effectuated by Post-Judgment Receiverships Post-judgment receivers can use assignment orders to take over certain rights of judgment debtors so the judgment creditors can get what is owed.

California Corporations Code § 308 authorizes a court to appoint a provisional director or manager to break corporate deadlock.

The remedy is faster and lighter. It keeps the business operating and the employees in place while the dispute proceeds toward resolution.

Learn more about provisional directors: https://na2.hubs.ly/H06NBvf0

Appointment of Provisional Director A provisional director can evaluate complex business circumstances and make a decision that benefits all stakeholders as fairly as possible. 

In El Centro, an 8-unit apartment building sat vacant long enough to be stripped of its wiring, air conditioning units, copper piping, and appliances, then used for squatting and drug activity.

California offers several tools for abandoned properties through code enforcement and abandoned building ordinances. Which tool works depends on the underlying problem: an unresponsive owner, unpaid taxes, a disengaged lender, or an unresolved title.

By the time Griswold Receivers was appointed to the property, the rehabilitation required close to $400,000 in outside funding and on-site security throughout the project.

The building now stands as finished apartments, restoring housing stock and removing a public safety risk from the neighborhood.

Learn more: https://na2.hubs.ly/H06LH4w0

California Abandoned Property Laws and Strategies California’s abandoned property laws allow local governments and city attorneys to address dangerous properties, especially with the help of a receiver.

A receivership petition rises or falls on the evidentiary record.

Courts want photographic documentation over time, a full notice and citation history, and sworn declarations tied to the specific property. They need confirmation that the situation is a threat to the community.

The petition also needs to show a path forward: a neutral, experienced receiver ready to step in and a way to secure the costs involved.

When that record is built well, courts can act with confidence, and cities move closer to a restored property and a safer neighborhood

More about what the courts need here: https://na2.hubs.ly/H06JkG10

Appointing a Receiver: What the Court Needs to See Receivership petitions succeed when cities present photos, timelines, and official records showing properties pose real public health and safety risks.

The cost of inaction on a chronic nuisance property compounds across a fiscal year.

A property that cost $40,000 in code enforcement, fire response, and EMS calls last year will cost more next year if nothing changes. The trajectory continues until the property gets rehabilitated or sold. Receivership can be the change agent.

https://na2.hubs.ly/H06szkB0

How Court Receivers Help Cities Avoid Blight-Damage Costs Court receivers help cities reduce costs from blighted properties by reducing emergency calls, streamlining enforcement, and securing unsafe buildings.

Cities: Which properties on your chronic-nuisance list make good candidates for receivership?

The strongest candidates have some things in common:

1. Documented violations spanning multiple inspection cycles
2. A disengaged or difficult-to-reach property owner
3. A history of failed citations, abatement orders and administrative hearings
4. Conditions that negatively affect the surrounding community
5. A rehabilitation scope that's feasible for the property's equity position

July is the right month to triage the list.

https://na2.hubs.ly/H06mrbX0

5 Signs a Nuisance Property is Appropriate for Receivership Health and Safety Receivership in California, Arizona, and Nevada is an important legal solution to troubled real estate, including nuisance properties.

The relationship between chronic nuisance properties and crime is well-documented, but it tends to get left out of the budget conversation.

A nuisance property generates more than code violations. It tends to generate police calls, drug-related activity, transient occupation, and the kinds of conditions that drag a neighborhood's safety and property values down with it.

The patterns are consistent across studies of chronic nuisance properties:
- Police call volume on a single chronic nuisance property runs several times the average for surrounding properties.
- Drug-related activity concentrates on properties with absentee or unresponsive owners.
- Nearby property values decline as the chronic conditions persist.

The crime profile of a neighborhood shifts when 1 or 2 properties become persistent problem locations.

For cities, this is the connection that makes the case for receivership in front of a city council. The fire department line and the code enforcement line tell one part of the story. The police call log tells the rest.

Read more: https://na2.hubs.ly/H065TdQ0

Chronic Nuisance Properties: The Overlooked Crime Connection Discover how chronic nuisance properties quietly fuel crime—and how cities have implemented their own remedies to reduce the cycle and restore safety.

You won the case and the judgment was entered. But, the defendant won't pay, won't respond, and won't disclose where the assets are.

A post-judgment receivership shifts the dynamic. The court appoints a receiver with authority to take control of the judgment debtor's assets, business operations, or rents and profits to satisfy the judgment. The receiver has subpoena power, can compel disclosure of financial records, and reports findings to the court.

For attorneys with collectible judgments and uncooperative debtors, a post-judgment receivership is one of the more useful enforcement tools in California's Code of Civil Procedure.

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A Guide to California Post-Judgment Receiverships Post-Judgment receivers are essential in getting judgment debtors to follow the court's instructions.

Neil Sheaffer, Managing Attorney at Griswold Receivers, will be presenting at the CACEO Roundtable Session on receiverships in Hollister, California on June 25.

The receivership remedy can be one of the more useful tools in a code enforcement officer's toolkit, and it's one of the least understood.

Neil will walk through the conditions that make a property a candidate, the evidentiary record that supports an appointment, and the pre-petition steps that strengthen the case.

For code enforcement officers working chronic nuisance properties, the session is worth blocking the date for.

Details and registration through CACEO: https://na2.hubs.ly/H069ZNC0