This publication serves as a refreshed version of our prior Receivership Case Studies originally released on August 12, 2019, and later supplemented by an update on February 1, 2022.

Troy, Michigan – Court-appointed receiver Frank R. Simon, Esq., together with the receivership and restructuring team at Simon PLC Attorneys & Counselors, is frequently asked to outline the firm’s experience managing a wide range of court-supervised matters. Over the years, Simon has been appointed in receiverships, assignments for the benefit of creditors, bankruptcy-related matters, and similar court-directed actions in both state and federal jurisdictions nationwide. The Team is well-versed in navigating distressed assets, contentious debtors, and complicated business situations. In every appointment, the objective extends beyond maximizing returns for creditors—the Team strives to stabilize and improve the underlying collateral wherever possible to support future value and utility.

The case studies below highlight the diversity and complexity of recent matters handled by Simon and the Team.

1. Blighted & Neglected Properties

Municipalities often rely on receivership as a remedy when owners fail to maintain properties, violate ordinances, or allow structures to fall into disrepair. This year, our Team has nearly completed a major transformation of a long-abandoned hospital campus situated on a prime piece of real estate. Once a point of pride for the community, the property had deteriorated into a severe eyesore. Over the past eighteen months, the Receiver oversaw the demolition of large concrete buildings, grading and land restoration, and the processing of concrete, steel, and rebar. Because the site borders an international waterway, environmental compliance—including remediation, tank removal, and wildlife concerns—was critical. Working with local and state agencies, the Receiver secured environmental grants and ensured the property owner continued making required investment payments. Before year-end, the site will be a restored, environmentally compliant parcel ready for redevelopment.

2. Liquor-Related Operations

Receivership is an effective tool for creditors holding interests in businesses with liquor licenses. Our Team regularly handles liquor, convenience, and party store operations. Receivers can take possession of the license, be recognized by licensing authorities, and continue business activities while a sale is arranged. Recent engagements include stabilizing a liquor store by replacing management, maintaining operations, preserving goodwill, and selling the business as a going concern. These cases often arise from disputes among owners or family members, especially where installment purchase agreements or private loans are involved. This year, we managed several such situations, including a case where a “sub-tenant” operated without authorization or compliance. Success in these cases requires a receiver who can quickly control cash intake, conduct inventories, install new management, and navigate the emotionally charged disputes common in these small business settings.

3. Marijuana Industry Assets

Our Team manages a broad range of cannabis-related businesses. Although numerous states have legalized marijuana, federal law still prohibits its manufacture and sale, creating unconventional lending arrangements, complex ownership structures, and unique risk considerations. State-level receivership is often the most effective remedy available, and many state statutes expressly authorize the appointment of a receiver to operate marijuana licenses in trust. Marijuana-related assets often present zoning restrictions and limited alternative uses. Market volatility in pricing, supply, and demand can cause rapid financial distress. In recent years, we have overseen everything from high-traffic dispensaries to disputed grow facilities, including one matter that escalated into criminal contempt proceedings before ultimately concluding in a successful sale. We have also secured and marketed abandoned cultivation and processing facilities while negotiating restructuring arrangements supported by secured creditors.

4. Ownership, Shareholder & Partnership Disputes

Disputes among business partners—especially when family dynamics are involved—are a recurring theme in receivership. Recently, our Team resolved a highly contentious dispute between restaurant co-owners whose conflict had rendered the business unmanageable. In another matter, we were appointed over a picturesque resort known for weddings and events but paralyzed by disagreements among relatives and affiliated partners. The Receiver implemented rebranding, website enhancements, guest-service improvements, and operational restructuring while the parties worked through their litigation. These situations demonstrate the value of a neutral receiver in stabilizing operations until a long-term solution is reached.

5. Divorce & Family-Related Litigation

Family law courts frequently rely on receivership when marital or probate disputes threaten asset preservation. These engagements can be among the most challenging due to emotional intensity and allegations of misconduct. This year, our Team secured and recovered real estate transferred fraudulently by a spouse attempting to circumvent the court. The appointment of Receiver Simon was upheld unanimously on appeal, affirming the necessity of receivership to protect and ultimately liquidate the couple’s assets.

6. Judgment Creditor Actions

When garnishments, debtor exams, and seizure orders fail, judgment creditors often pursue receivership. This year, our Team completed a seven-month investigation into a sophisticated debtor whose assets were dispersed across multiple LLCs. Receiver Simon reviewed pledged collateral, analyzed numerous lawsuits from roughly thirty interested parties, and produced a comprehensive audit detailing financial transactions and the propriety of the debtor’s organizational structure. The Court accepted the findings, enabling the matter to move forward.

7. Residential & Multi-Tenant Properties

Lenders commonly turn to receivership to enforce remedies involving occupied rental properties. While foreclosure is often cost-effective, statutory timelines, redemption periods, and other procedural delays can impede recovery. Receivership provides immediate control of operations, rent collection, security, remediation of blight, and investigation of mismanagement—often followed by a sale without a redemption period. In the past year, our Team has managed assets ranging from single-family homes to a portfolio of fourteen historic apartment buildings built between 1924 and 1954. These structures, although significantly distressed, present substantial potential for experienced investors. Receivership permits structured negotiations, due diligence, earnest-money escrows, and thoughtful purchase agreements that are not possible in traditional foreclosure auctions. We also recently accepted an appointment involving a newly constructed apartment complex whose owners became overextended operationally rather than physically.

8. Financial Crime & Fraud Matters

Not all receiverships center on physical assets. This year, we were appointed to manage a unique case involving substantial financial losses at a title agency caused by employee embezzlement. Beyond missing funds, numerous closings were left incomplete, leaving deeds, mortgages, and fees outstanding. With escalating claims and affected parties, the court’s appointment of Receiver Simon allowed for immediate stabilization, protection of remaining accounts, and initiation of a fraud investigation. Within sixty days, the Receiver produced detailed reports reconstructing the movement and disposition of funds. The underlying fraud—an international wire-transfer scam—had persisted for nearly two years. Receivership provided the structure needed to halt losses, secure documentation, and protect claimants.

Firm Overview

Simon PLC Attorneys & Counselors is a full-service commercial litigation and financial-institution law firm headquartered in Troy, Michigan. For more than two decades, the firm has represented clients across the United States and Canada. Frank R. Simon is a recognized authority in receivership, restructuring, and the management of distressed assets and has been appointed in multiple jurisdictions. He is licensed to practice law in Michigan, Illinois, New York, and the District of Columbia, and also holds a real estate broker’s license.

Important Notice

This material is not legal advice. If you wish to discuss the specifics of a particular matter, please contact us directly. The information provided here may not reflect current developments and should not be relied upon without consulting qualified counsel licensed in the relevant jurisdiction. Laws differ across states and circumstances vary widely; therefore, readers should seek legal guidance tailored to their situation.