Hi, I’m Dan Collins – a California licensed real estate broker with expertise in real property matters in Probates and Trusts. I am also a California licensed general contractor and receivership expert. To learn more about receiverships protecting values, please visit my website: probate-realtor.biz
Today I want to give you an example of how a Receiver can be useful in cases of divorce.
Let me tell you about a case I worked on involving a very unhappy divorce. A married couple owned a California licensed property management business and, over a period of two years before the wife filed for divorce, her husband had been skimming profits. This allowed the husband to create a “war chest” of cash, and to falsely mask the value of the business by underreporting net income.
Now theirs had been a long-term marriage, and the wife had started the business years before her husband came into the picture. When the wife discovered the skimmed profits, she retaliated by emptying the client trust account. There were tenants moving out of homes and apartments who had security deposits at risk as well as client funds held in trust, which creates a very serious situation on many levels.
The attorneys representing the parties quickly realized they had a situation where the actions of the litigants were becoming destructive to the property management business, so they requested the appointment of a Receiver on an ex-part basis with the hope that the Receiver would, with a properly crafted Court Order, quickly step in and salvage the business.
As an impartial and neutral Receiver, I convinced the wife to return the unused trust monies, which allowed the Receiver to honor and return property management tenants’ security deposits and client trust funds. Had a receiver not been appointed and been afforded the ability to take quick action, tenants and clients would surely have filed complaints with the California Bureau of Real Estate, which would have taken disciplinary action that may have resulted in the loss of both the husband and wife’s California real estate broker licenses.
Then, I counseled the husband that his skimming of business profits would end badly if he didn’t come clean and return the money, and fortunately he listened to reason. By returning monies to the business, he avoided prosecution.
As the Receiver in the case, my job was to protect and preserve the business for the benefit of all, and fortunately I was able to do that. The unhappy couple did finally get divorced but the business avoided the consequences of not being able to return tenant security deposits and client trust funds which preserved the husband and wife’s professional licenses. Protecting their professional licenses allowed them to divorce and still have their livelihood.
I’m Dan Collins, a California licensed real estate broker, general contractor and receivership expert. To learn more, please visit my website: probate-realtor.biz