Check out the complete gallery of photos taken at the symposium.
Since the Loyola Symposium in January 2020, it’s been a wild toad ride through a two-year pandemic that almost allowed the gathering in January 2022, but Covid variants caused Loyola IX to be rescheduled to April 28-29, 2022. It was a full house, grand reunion among colleagues from across the state at the Hyatt Regency John Wayne. With 150 in- person registrants and remote attendees, all experienced a broad curriculum of educational and social offerings.
Christopher Thornberg, PhD, founder of Beacon Economics, continued the Symposium’s tradition of delivering the Thursday dinner keynote with his economic forecasting organization’s take on the state of the economy. A blizzard of graphs, charts, and summaries used a microscope on every angle of economic data for 2010–2022.
Bottom line? The world has profoundly changed in the last two years. Conventional doomsday predictions proved to be adisconnect – s pending is up, disposable income is up, more jobs were created, and equity is on the rise. Dr. Thornberg commented that in past years he was comfortable predicting what was coming. Today, the risks are bigger and harder to predict. He said, “It’s too good to go on, and it won’t.”
He illustrated that the U.S. economy is in a time of “too.” Too much money/spending, too much inflation (with no soft landing in sight), too many supply chain problems, too few workers (drop outs and baby boomers retiring), too much government debt, and too much uncertainty to cost out major investment decisions. Curing inflation with quantitative tightening will be painful, but the choice is pain now or worse pain later with a harder crash. It was fortuitous that the Pacific Club served a fabulous chocolate dessert to end the evening on a sweet note.
Closing Question: What do you think about crypto currency? Answer: Bitcoin? Ponzi scheme.
Special Thanks to Bob Mosier, Mosier & Co., Inc. for making the Pacific Club available to the California Receivers Forum for Loyola Symposium’s opening dinner.
Friday: 10 Programs & 16 Roundtables
CRF President, Richard Ormond, kicked off the morning with Welcomes, Thanks, Remembrances and Donations. Loyola Law School Dean Michael Waterstone received an oversized check for $5,000 to the Juris Fund, from the Receivers Forum in appreciation of the Loyola Law School of Los Angeles association with the symposium “since the beginning.”
Hon. Mitchell Beckloff, Los Angeles Superior Court, assigned to the Civil Division and currently presiding over the Writs and Receivers Department, began the morning with a summary of the breadth of the Los Angeles County Superior Court system. From the pandemic closure of the court, to virtual court, to hybrid court, and back to some in-person appearances has been a process for the system. Judge Beckloff closed with Five Tips for receivers, beginning with number 5.
5. Inventory is very important. Be sure it is clear and undisputable from the beginning of your appointment as a receiver.
4. Status Reports, with all parties copied and filed electronically, are a good way to keep the judge up to speed on the important actions of the matter and uncover any concerns throughout the case, rather than at the end.
3. Ex parte Motions should be reserved for true emergencies. Getting a motion one afternoon, then more papers from the parties in the early morning and hearing in the afternoon is a challenging timeline for the court staff and judge given a full calendar already set.
2. Road Map is a concise summary of what is going on in the receivership, showing what is agreed upon and what is unsettled/ongoing, is helpful to the judge.
1. Status Conferences offer an opportunity to unwind issues timely, so they do not present end of case issues that require backtracking to resolve.
California Judges Panel
Moderator, Oren Bitan, from Buchalter, welcomed bankruptcy judge, Hon. Meredith Jury (ret), along with Hon. Mary Strobel and Hon. Mitchell Beckloff, both of California Superior Court, Los Angeles. The judges commented on questions posed by the moderator beginning with the future of in-person or remote hearings. The benefits of virtual hearings for the court, lawyers, and clients are no commute, no parking charges, less waiting, and potential lower cost for the case. As the court is again open for in-person hearings, all parties must agree to a remote hearing. Judge Strobel commented on the chance of missing an important word and non-verbal cues during remote hearings.
The Superior Court judges pointed out that there is a high bar of evidence needed to appoint a receiver and that there are a small number of appointments each year. When more than one receiver’s name is submitted in a case, the judges said that careful review of the candidate’s background and experience in similar matters provides some guidance.
California Judges Panel: Oren Bitan, Moderator; Hon. Judge Meredith Jury; Hon. Judge Mitchell Beckloff; Hon. Judge Mary Strobel
Judge Jury commented that sometimes when difficult discussions among the parties are not moving toward agreement, coming before the judge in-person in a court setting, with the formality of a courtroom, the seal on the wall, the flag and a judge in robe improves decorum and promotes reasonableness.
It was an insightful hour for practitioners hearing from Judges Jury, Strobel and Beackloff, and the Receivers Forum is grateful for their time and candor.
Sixteen table topics offered a wide range of topics, each hosted by a content expert. Even in a very large room with the window wall open to a garden lawn, a decibel meter would have recorded a high level of engagement and discussion. The challenge was deciding which table to join.
One new topic that peaked this author’s interest was Mia Blackler on “Freeze! Seize! Distribute! Treatment of Assets in Criminal Receiverships.” Lots of new things that I did not recall previously being discussed – court-ordered definition of a victim, working relationship with the District Attorney, criminal courts operations issues, seizure and turn over of assets, operating a business, resolving litigation and distribution impacts of Penal 186.11, receivership law and prior court orders – to name a few.
“Distribution methodologies can become quite complicated, so it is critical to know the intricacies of the intersection of criminal and receivership law along with the unique features of the receivership assets and interested parties to assist in achieving the most just outcome.”Mia Blackler, Lubin Olsen
Casey Ives from KCC hosted a table on Noticing Issues saying to consider alternative technology and multiple bank options by partnering with KCC. That can eliminate unnecessary costs to the firm or estate and reduce the frustration and administrative burden of time keeping, expense reporting, and banking for noticing.
FRES, Fiduciary Real Estate Services, in Newport Beach brought a diverse real estate perspective to receivership matters in New Laws: AB 633 and AB 838. Host Ruben Martinez said, “Newly enacted legislation is affecting receivers and partition referees. Beginning with how properties can now be partitioned amongst relatives/heirs, to how tenants can trigger costly repairs, the new legislation has changed the course for receivers and partition referees.”
David Weinberger and Phil Seymour from The Seymour Group, Keller Williams, shared experiences with Marketing and Closing Receivership Property Assets.
“Twenty-three years of solely serving the fiduciary community in selling all types of real estate assets, from health and safety code violation properties to multi-million- dollar estates has taught our group to be flexible in even the most contentious cases and utilize proven strategies to overcome any hurdles that arise in a court-ordered sale.”
Peter Ingersoll, Safe Harbour Equity, had a lively table discussing everything around the edges of cannabis cases in Momentum: The Key to a Successful Cannabis Receivership. “The tension starts with the 40 or so state’s
laws and the federal statutes. I don’t see that changing when the feds take their tax percentage off the gross receipts of cannabis businesses. Mix that with cash business, banking challenges, lack of access to corporate capital, untraditional investors/owners and culture that celebrates operating outside of the law…it is a recipe for needing a receivership.” Peter had a cannabis trivia game planned and remarks about the Safe Harbour Lending programs for cannabis receiverships, but the engaged table conversations may have sidetracked the trivia game.
Receiver Tools Needed to Conduct or Defend a Commercially Reasonable Sale topic was hosted by Todd Wohl, Braun and Premiere Estates International. Todd has a long history of marketing unique and challenging properties.
“Rule # 1: Use Common Sense. Never market the sale to a minimum level, but rather to the level at which any party involved could not argue that the marketing was not done sufficiently to maximize the sale price of the asset. Follow a logical process from start-to-finish so the court and the buyer understand how the sale process works and want to participate.”
Receiver’s Counsel – Critical Team was hosted by Mike Essary of CalSur, the longest serving CRF leader of the San Diego Council. CalSur is a property management company that also accepts receiverships. Here’s what was overheard at their luncheon table, “While there are receivers who are attorneys, many of us are not. Straight forward rents and profits cases sometimes do not require counsel, but partition actions, business operations and cannabis cases have legal needs that make your experienced counsel absolutely critical to carry out the court’s wishes.”
Eric Sackler, Coldwell Banker Commercial Realty in Los Angeles, hosted Getting Office Property Leased Up in 2022. Companies moving and workers preferring to stay remote part of the time have driven change, as have Class B tenants wanting to step up to attractively priced leases in Class A space. Eric observed, “The pandemic has caused a major disruption in office leasing, but not in all markets and not amongst all tenant industries. The manner in which tenants are utilizing office space has changed, requiring many landlords to make physical alterations in order to get space leased up.”
Busting Blight, Health & Safety Receiverships by Rick Harmon included informative tips about a tough assignment. But his Harmonisms may be most recalled: “One way or another, you’re going to get an education.” “Plan your work and work your plan, but in health and safety receiverships, don’t plan your results.” “There are a few things you should never ask for a discount on: haircuts, brake jobs, and title and escrow.” And lastly, “You can’t eat equity, but it CAN feed you.”
CRF’s Young Professionals Council has taken the lead in recent years using socials as a forum to bring together their 20’s and 30’s colleagues. The result has been an infusion of energy, optimism and using technology to do some things better. The first cohort of the YPC has made the move into leadership positions around the state. The second wave is building momentum led by co-chairs Annelise Hitchman, Hitchman Fiduciaries and Bailey Martinez, Fiduciary Real Estate Services, both from Orange County. Did they draft you with a big blue YPC button? There is lots of room to grow your receivership career and industry leadership with the YPC.
Dennis Gemberling of the Perry Group International has spent a career working with the hospitality industry. Hospitality Receiverships Revisited talked about restaurants, bars, hotels and hospitality venues that went from going concerns to locked front doors when the government mandated shut downs. Over two years, some hospitality venues opened in spurts after inventing new ways to operate. “Get back to the basics and don’t underestimate the importance of cash controls, taking inventory, redirecting credit card deposits and simple daily reports to instantly improve income when taking over a hotel or restaurant,” opined Dennis.
“Hospitality businesses’ most valuable assets are their employees – preserve them first,” continued Gemberling, “When the employees don’t come back, then what?”
Cohesion Between Receivers and Their Appointing Judges by Benjamin King, Loeb & Loeb
“Since nearly all the powers of a receiver derive from the appointing court’s order and rulings, a receiver should act deliberately to foster and maintain a healthy and mutually supportive relationship with the appointing judge from the outset and at every significant step thereafter. How that relationship looks will differ based upon the appointing judge and the circumstances of the case. But like all healthy relationships, it will require focused effort and attention,” commented Ben King.
Tax Issues for Receivers by Byron Moldo, Ervin Cohen & Jessup
Tax talk is one of those topics that receivers continually review, to get it right in the cases and to be sure they are not incurring any personal liability.
Takeaway: “Not all taxes are created equal, it’s in the details,” says Bryon.
Cannabis Receiverships or Large Corporate Receivership Cases by Kevin Singer, Receivership Specialists
Three Top Tips: When you are running a large corporation or a cannabis business receivership: 1) get the money, 2) preserve the records, and 3) look for talent and leadership inside the company to help you run the business. Perhaps there should be a 4) Don’t assume that anything on # 1 and # 2 are easy or as they appear.
Nuances of Property Management & Challenges in Covid Environment
Vinny Jain, Ingenious Asset Group, led a lively discussion focused on new government rules and laws enacted since the start of the Covid-19 pandemic, providing numerous tenant protections and how they affect the management of real estate assets. Receivers and attorneys at the table had consensus that the ever-evolving state and local laws for tenant protections have made it very difficult for property owners and receivers to effectively manage any real estate asset. The cost of the regulations has adversely affected the financial implications of some already distressed assets.
Actual situations with difficult tenant(s) were shared. Giving a wrong notice to a tenant, or NOT giving a required notice in some jurisdictions, can put the receiver or property owner in a worse situation regarding tenant protection laws. Knowledge of local, state, and federal laws related to tenant protections and property management is critical, and having a knowledgeable property manager to keep up with everything is of utmost importance. Everyone agreed that having the “right” property manager is an asset, and not an unnecessary expense.
Eviction Moratoriums and Landlord Tenant issues were discussed, with Good News – Bad News commentary by Daniel Taylor from The CREM Group. Residential and commercial rent collections dried up during the start of the pandemic. Evictions were stayed by governmental orders. Then the flow of PPP grants began and Rental Assistance programs provided some landlord relief at 80%. Next the Rental Assistance Program went to 100% of past due rents owing. But then the program ended and stopped taking applications in March 2022. Processing payments to landlords has been slow. Eviction moratoriums on some properties in some counties are extended to the end of 2022. Generally, commercial properties past due rent evictions can go forward in all of California at this time.
Healthcare Receiverships are possible in a broad range of health-related businesses. The bigger or broader the scope of the health care provider services, drives the complexity of a receivership. Complexity increases with the number of stakeholders – the community, doctors, all the related services providers, the facility owner, and the patients. Table host, Michael Bubman, of Mirman, Bubman Nahmias, shared that his advice is to “know your regulators and communicate with them often to increase your chance of successful outcomes.”
Receiverships 101: Learn From the Pros
Panelists: Ben King, Loeb & Loeb; Jarrett Osborne- Revis, Buchalter; Scott Sackett, Fiduciary Management Technologies
Moderator: Ryan Baker, Douglas Wilson Companies
Starting with “What is a receiver?” the panel signaled their hard-earned experience with the reply – a job where you never know what you are getting into…with the additional advice – this is not a job for anyone afraid of conflict.
They worked through the usual list of the types of receiverships and discussed the receiver’s role as a neutral who is not a party in the case or who has a preference for any entity in the receivership. The only person who can say “my receiver” is the judge. The take away advice was to “stay within your experience lane and only take matters where you have the background to know the operational aspect of the type of receivership.”
When Breaking Up Is (Too) Difficult, Think About
Calling a Receiver or Partition Referee
Panelists: Byron Moldo, Ervin Cohen & Jessup; Kyra Andrassy, Smiley Wang-Ekvall and Michael Bubman, Mirman, Bubman & Nahmias
When assets need to be sold to split the value several ways, CCP § 873.520 or CCP § 873.610 outline the manner and terms of sale. The skill of the receiver comes in also managing and getting agreement from the asset value recipients. Receivers are commonly called on to be the neutral in corporate or partnership dissolution proceedings.
The panel also discussed the possible role of a receiver in the involuntary dissolution of a corporation. If the court has reasonable grounds to believe that unless a receiver is appointed, the interests of the corporation and shareholders will suffer pending the disposition of the complaint, the court can appoint a receiver to take over and manage the business and affairs of the corporation and to preserve the property pending the hearing and disposition of the complaint.
“Business divorces don’t need to be unpleasant. Consulting with an expert such as a receiver or partition referee in advance can make the process much more tolerable,” added Bryon.
Using Receiverships to Manage, Operate, Restructure and Sell Going Concerns
Panelist: Christopher Celentino, Dinsmore & Shohl; William Freeman, Katten Muchin Rosenman; Richard Munro, Invenz; Joel Weinberg, Insolvency Services Group
Moderator: Richard Golubow, Winthrop Golubow Hollander
Appearing onstage and remotely on the big screen, the panel delivered a plethora of information across this broad topic in 60 minutes. The panelists discussed touch points on dealing with pending litigation and creditors, the staying of creditor actions, and being sure the appointing order authorizes the receiver to defend, prosecute and settle litigation. They also addressed ensuring that the order authorizes the receiver to take appropriate steps on avoidance actions, fraudulent and preferential transfers and grants standing so the receiver can oversee claims of creditors.
The claims administration process and the myriad of deadlines and prioritizing, treatment, and ability to compromise claims were discussed.
Take aways: When selling an asset or business, only do so subject to court order. Be vigilant to make no warranties, promises, or forward-looking statements, sell as is, where is, and fully disclose the status of title insurance, if any, on the asset.
The Ins and Outs of Hospitality, Restaurants and Liquor License Receiverships
Panelists: Phil Cutting, Douglas Wilson Companies; Dennis Gemberling, Perry Group International
Moderator: Michael Muse-Fisher, Buchalter
Starting point: Every problem is an opportunity in disguise. The pandemic shut down this industry for months, the PPP money ran out, the staff was let go and when the re- opening began, the most valuable asset, the trained staff, did not come back in big numbers. The bit of good news is that the industry found that hotel guest customers would tolerate reduced services (housekeeping every 3 to 4 nights), that touchless service took less staff, and restaurants could be closed or reduced to take out – adding economic efficiency to their operations.
The still pending question is how long the CMBS (commercial mortgage backed securities) will hold on with extended term modifications versus loans going to special servicing or foreclosure. Leisure travel is rapidly coming back; business travel not so much. Zoom business meetings worked for 2 years – why travel to meet? Smaller and mid- size properties are rebuilding their business faster than big box convention properties. Larger hotels are just seeing in- person conferences and trade shows return, although not at the same registration counts as their 2019 programs.
The big question in an environment of high inflation, increasing interest, world turmoil, stock market down and talk of recession increasing – how much longer will the forbearance agreements continue?
Office and Retail: Where It’s At and Where It’s Going
Panelists: Mark Birnbaum, Perkins Cole; Alexander Quinn, Jones Lang-LaSalle
Moderator: Michelle Vives, Douglas Wilson Companies
This program started with Mark Birnbaum running through the alphabet soup of CMBS loans: Security loans, PSA Pooling & Servicing Agreements, REMIC Real Estate Mortgage tax issues, Master Services vs Special Services and DCH/CCH.
The panel moved on to how decisions are made within tranches, the bond holder approvals process, how bad boy carve outs happen, the implications of non-recourse loans, borrower/sponsor relationships (or lack thereof), carve out liability, net present value toward the end with imminent default – full recourse triggers – where a receivership is better than a bankruptcy. It was a high speed trip through a process that lacks transparency from an outsider’s perspective.
The CMBS have been slow to pull the trigger on defaults. They see the empty offices, the resistance to return to offices, the lease end negotiations for less space and landlord provided tenant improvements to rework space design. Some rents are down, perks are up and Class B tenants are sliding into remnant Class A space.
Closing advice: Don’t step on a rake.
Receivership and Receiver Liability for Taxes
Panelists: David Agler, Law Offices of David M. Agler; Dominic LoBuglio, Dominic LoBuglio CPA; Kevin Singer, Receivership Specialists; Sue Tomlinson, Crowe Horwath
“Don’t let the word taxes in the panel title mislead you to thinking this will not be exciting. The truth said, this panel was the rock opera of taxes,” according to Kevin.
The list of possible taxes is long and the liability for a missing payment of a tax is personal to the receiver. What the receiver is responsible for depends on the purpose of the receivership, the scope and powers of the appointment order, the entity ownership structure, and the receivership case assets.
Accrued and current tax liabilities, federal, state and foreign obligations, income and franchise taxes, payroll withholding, tax return, sales, use and excise taxes and property tax are starting places to investigate payment status. Section 874.1 reminds receivers that the court cannot make tax decisions or absolve receivers of tax liability.
Chad C. Coombs and David M. Agler authored a five- page article on this topic that appeared in the Los Angeles Lawyer in March 2015. Contact the authors for copies of this in-depth article.
Closing reminder: Don’t close a case until all taxes are paid or formally settled.
The receiver can be personally liable and by statute you can’t claim you relied on another professional or simply made an error to escape the liability.
In A World of Few Options, Receivership Becomes the Solution
Panelists: Blake Alsbrook, Ervin Cohen & Jessup; Jeff Ghitman, New World Markets; Peter Ingersoll, Safe Harbour Equities; John Mandel, Akerman
Moderator: Eric Kaufman, Dama Financial
In some difficult business situations, a receivership is the last hope before a bankruptcy is the only remaining choice, except in the case of most types of cannabis-related businesses that are not accepted by the federal bankruptcy court. When a receivership is bleeding and there is no hope of recovery, it is important to timely let the court clearly know the situation so the judge can decide to keep the receivership in place or conclude it. An example is where various tax liabilities are so big, there is no hope. Communicate with the judge and the business owners so they understand the “why” of the receiver’s recommendation.
Peter Ingersoll’s view from the cannabis trenches boiled down to his comment “the political will is not there at the federal level to take on many states with different cannabis laws to try for a common set of regulations. States’ rights issues are long fights and the feds enjoy taxing the business gross, so why rock the tax revenue boat.”
Cannabis receivership takeaway: the receiver’s job #1 is to preserve value in the business–and begins with keeping the local cannabis license in good standing. Perhaps not easy, but essential.
Receivers in Bankruptcy: Strangers In A Strange Land
Presenters: Gerard Keena, Bay Area Receivership Group; Ron Oliner, Duane Morris
The last program of an intense Loyola IX Symposium. Some businesses appear to belong in a receivership and others in a bankruptcy. Deciding which route to take can be a complex decision matrix. As receivers, lawyers and other insolvency professionals know, things change and what was
right one month turns and becomes no longer viable. Gerard recounted his very first operating business receivership that involved a gas station. It became evident that the judge and receiver were spinning their wheels. The assignment to preserve and protect was not working, the receiver and creditors were not going to get paid; it belonged in bankruptcy.
Keeping the receiver in place when the defendant files a bankruptcy to dispossess him or her requires quick, calculated action in the bankruptcy court, observed Ron.
When a matter starts in receivership and needs to file bankruptcy, there comes a point at which the receiver needs to turn over the “keys to the door and checkbook” to the bankruptcy trustee. Ron Oliner shared insights on how to accomplish the statutorily required task.
Closing Fiesta – Sponsored by FRES Fiduciary Real Estate Services
The collegial relationships among the receivership community were evident as most Symposium attendees and speakers stayed Friday evening for some social time together. Live mariachi music, a taco bar, the makings for nachos, and tequila tasting got the party started. A blindfolded Todd Wohl working on the Pinata bashing was an Instagram moment.
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It takes months for volunteer leaders to plan and execute a Loyola Symposium. The Symposium would not be possible without “everyone” from leaders to speakers, sponsors, exhibitors, and attendees.
Special recognition to Amy Olsen and the Olsen Management team for planning the January 2022 Loyola, adding a hybrid version, cancelling the January dates, negotiating with the hotel to cancel January and rebook and excellent execution of the April live and hybrid versions.
Our Thanks and Appreciation,
California Receivers Forum Board of Directors and Regional Councils Leadership
*Jeanne B. Sleeper, CEO, JBS & Associates was the CRF’s first Executive Director. She handed over the CRF management to Olsen Management in summer 2021 and is honored to have been invited to author the Loyola IX recap article. This explains her furious note taking at all of the Symposium sessions. After being grounded for two years by pandemic travel restrictions, Jeanne is headed to Cayman Brac in June with her new underwater camera, thanks to CRF’s retirement gift generosity.