Fall 2004 • Issue 15, page 1

"Loyola II" Covers Receiverships A to Z in 2-day LA Program

By Rense, Kirk*

Certainly the most encyclopedic teaching seminar ever presented on receivers and re-ceiverships, the 2-day Receiver-ships in the New Millennium: Part II program presented October 8 and 9 at Loyola Law School of Los Angeles by the California Receivers Forum was a spectacular success by any measure.

Professional receivers, property managers, business turnaround specialists, accountants, title and escrow professionals, bankers and insurance specialists from every corner of California (and several from other states) convened in Downtown Los Angeles to share their expertise in and learn both fundamentals and fine points of being a receiver and receivership administration in 14 hours of lectures and presentations.

The program commenced Friday morning with a brief introduction to the history and legal authority for the existence and appointment of receivers, and concluded Saturday afternoon with expert panels on receiver’s final reports and accounts at case closing and post-receivership issues. Sandwiched between were presentations on (almost) everything a receiver needs to know or may encounter while serving his or her appointing judge.

Highlights of the seminar included:

• Panels on the beginning stages of a receivership (types of receiverships / the process of obtaining appointment of and qualifying as a receiver / the distinction between receivers and provisional directors);

• Receivership procedures, funding the receivership estate, and how to operate the receivership under both calm and stormy conditions;

• How to, first, locate and, second, sell and make distributions of receivership estate assets;

• The impact on the receivership of state and federal statutes dealing with health, safety and the environment;

• Legal and practical aspects of operating different types of receiverships – business receiver-ships, family law receiverships, hotel and health care company receiver-ships, regulatory receiverships, sub-standard housing receiverships, professional corporation liquidating receiverships and post-judgment receiverships to collect judgments;

• Issues of a more personal nature, such as the receiver’s rights and the risks he or she incurs in operations and administration, compensation of the receiver and her / his retained professionals for the work accomplished;

• A 16-part overview of the accounting and tax issues that a receiver should understand, supported with several hundred pages of exhibits, guidelines and applicable statutes.

Nearly every panel’s presentation was supported with written summations of the applicable law and practice and forms and exemplars of key documents – more than 700 pages, exclusive of the special tax materials already mentioned.

But the seminar wasn’t all business. Hosted breakfasts before each day’s sessions allowed the 130 attendees to renew acquaintanceships, meet new colleagues, swap war stories, gossip about the elections, baseball playoffs, USC vs. Cal, Nicky and Paris Hilton and other important issues of the day. Luncheons were special, featuring two terrific guest panels:

— Orange County Superior Court Judge Derek W. Hunt, Los Angeles County Superior Court Judge Thomas I. McKnew, Jr., Los Angeles County Superior Court Judge David. P. Yaffe, and former Los Angeles County Superior Court Judge Diane Wayne (Ret.) on Friday spoke on and fielded questions about:

• the appropriate use of receivers in different judicial settings,

• the scope of judgment latitude judges allow their receivers in different circumstances,

• the closeness (or distance) of the relationship to be maintained between receivers and their appointing judges/commissioners,

• use of receivers in a criminal law setting,

• the degree of protection they afford the receivers they appoint, and many similar issues.

— Peter A. Davidson, Esq. moderated a terrific panel of federal and state agency attorneys and regulators comprised of Kenneth H. Abbe, Esq. (Attorney, Federal Trade Commission, Western Region); Cindy J. Eson, Esq. (Branch Chief, Office of Enforcement, United States Securities and Exchange Commission); Mark Richelson, Esq. (Supervising Deputy Attorney General, Office of the California Attorney General); James K. Openshaw, Esq. (Senior Corporations Counsel, California Department of Corporations, Enforcement Division, Sacramento); and Victoria A. Dancy, Esq. (Counsel / Section Chief, Resolutions and Receiverships, Federal Deposit Insurance Corporation, Dallas Regional Office). The distinguished panelists discussed:

• the use of receivers in a variety of regulatory cases, ranging from investor fraud to federal and state statutory violations;

• the proper relationship between regulatory agencies and the receivers they petition the court to appoint;

• the degree to which they expect receivers to adopt or remain neutral on the allegations made and positions advocated by the respective regulatory agencies;

• how the use of receivers in regulatory actions can benefit both the involved regulatory agency and the public welfare the agency seeks to protect, and many others.

Peter Davidson, Esq., a founding member of the Receivers Forum and whose column “Ask the Receiver” appears in each issue of the Receivership News, was also honored at the Friday Luncheon with a special award by California Receivers Forum President Kyle Everett to thank Mr. Davidson for his many years of service to the Forum. Among his many contributions was serving as the first editor of the Receivership News (a voluntary post he held for six years). He also designed the forum logo and selected the motto “In Custodia legis” for the organization.

Other jurists participating in seminar presentations included:

• The Honorable Bruce Mitchell, Commissioner, Los Angeles County Superior Court, who joined with David Gill, Esq., Peter Davidson, Esq. and Alan Mirman, Esq. in discussing, among other things, the risks inherent in acting as a receiver , and the receiver’s authority to initiate suits on behalf of the estate. Commissioner Mitchell is a contributor to the Receivership News and a long-time friend of the Forum; and

• The Honorable Gretchen Wellman Taylor, Commissioner, Los Angeles County Superior Court, who joined with M. Daniel Close, CPA, in discussing the bases for appointment and the use of receivers in Family Law courts. Commissioner Taylor drew upon her seven years of family law judicial experience (preceded by 10 years in family law private practice) in illuminating the special challenges a receiver may face in assisting the Family Law court in marital dissolution proceedings.

The Loyola II seminar was guided from its inception nearly a year ago by its Chairperson Edythe L. Bronston, Esq. Ms Bronston was also chairperson of the initial Loyola receivership seminar.

Ms Bronston’s principal assistant in both endeavors was Patricia Hinojosa, Edy’s secretary, administrator, paralegal, factotum and emanuensis. Though not the recipient of honorariums for her efforts, Ms Hinojosa is equally deserving, proving the axiom that virtue is its own reward.

The backbone of the program was, as always, JBS & Associates. Jeanne Sleeper, principal of that firm, ensured that every physical detail was attended to and, with her associate Heidi Sutch, welcomed and assisted each attendee with unflagging courtesy and graciousness. That the complex seminar went off without a hitch is testimony to Ms Sleeper’s conscientious- ness and to her and Ms Sutch’s boundless energy.

One of the first questions enthusiastically posed by a participant to Ms Bronston at the conclusion of the conference was, “When’s the next one?”