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Rhode Island Receivership Attorneys
Our practice includes seeking and opposing receivership relief, addressing the scope of a receiver’s authority, protecting creditor and ownership interests, negotiating loan workouts, and representing participants in receivership sales and contested proceedings.
We approach each matter by identifying the client’s legal position, the property and financial interests at stake, and the practical consequences of the proposed relief. A lender seeking to preserve collateral, a shareholder concerned about company assets, and a condominium board responding to a receivership petition may face different issues—even when each matter involves court supervision of property or operations.
Our receivership work draws on the firm’s related experience in business law and commercial litigation, real estate law, creditor rights, and condominium law.
Representative Receivership Matters
Bilodeau Capalbo’s receivership representations include institutional lending, commercial condominium governance, and shareholder interests in an operating business.
Providence Place Mall Receivership
The firm represented a $90 million mezzanine lender in the Providence Place Mall receivership.
Commercial Condominium Receivership
The firm currently represents a board of directors in a commercial condominium receivership.
Body Shop Receivership
The firm currently represents a shareholder in a body shop receivership.
These descriptions identify the firm’s role in the matters listed. They do not state or imply a particular recovery, disposition, or outcome. Each representation depends on its own facts, governing documents, applicable law, and court orders.
What Is a Receivership?
A receivership is a court-supervised proceeding in which a receiver is appointed to take responsibility for identified property, assets, or business affairs. The receiver’s authority comes from the governing law and the court’s orders.
Depending on the circumstances, a receivership may be used to preserve assets, maintain business operations, protect revenue-producing property, investigate claims, administer creditor claims, or conduct an orderly sale or liquidation. It is not necessarily synonymous with closing a business or selling every asset.
The appointment order is central. It should identify the property or entity subject to the receivership and define the receiver’s responsibilities, authority, reporting obligations, and limitations. Questions about who controls an account, whether a business may continue operating, or whether an asset may be sold must be evaluated within that framework.
Under R.I. Gen. Laws § 10-21-12, the powers and duties of a receiver in a proceeding governed by the Rhode Island Commercial Receivership Act may be expanded, modified, or limited by court order. The fact that a receiver has been appointed does not eliminate the need to examine the particular authority granted.
When Can a Rhode Island Court Appoint a Receiver?
Rhode Island receiverships may involve statutory grounds, the Superior Court’s equitable authority, or both. The appropriate basis depends on the entity, property, parties, and relief involved.
Relevant provisions include the Rhode Island Commercial Receivership Act, the receivership and liquidation provisions of the Rhode Island Business Corporation Act, and the Superior Court’s equitable jurisdiction under R.I. Gen. Laws § 8-2-13. Rule 66 of the Superior Court Rules of Civil Procedure also addresses receivership procedure.
For proceedings within the Commercial Receivership Act, R.I. Gen. Laws § 10-21-6 identifies grounds for appointment. These include protection of property or its revenue-producing potential against specified dangers, enforcement of judgments, certain circumstances involving dissolution or management of non-individual entities, and equitable grounds.
The statute also addresses appointment in connection with foreclosure or enforcement of a security agreement. Relevant circumstances may include a need to protect collateral, a signed agreement concerning appointment on default, insufficient security, or failure to turn over proceeds or rents that the secured party was entitled to collect.
For corporate proceedings, R.I. Gen. Laws § 7-1.2-1314 addresses grounds for judicial liquidation, including specified forms of deadlock, illegal or oppressive conduct, fraud, insolvency, and misapplication or threatened waste of assets. Section 7-1.2-1323 separately addresses appointment of a receiver when the required grounds exist but liquidation would not be appropriate.
Our Rhode Island receivership attorneys evaluate the applicable legal basis, the evidence supporting the requested relief, and whether a narrower or negotiated remedy can adequately protect the client’s interests.
Appointment Is Not Automatic: Standing and the Need for Relief
A receivership petition requires more than an assertion that management has performed poorly or that the petitioner has suffered an economic loss. The petitioner’s standing, the statutory or equitable basis for relief, and the proposed scope of the appointment require separate attention.
In Epic Enterprises LLC v. 10 Brown & Howard Wharf Condominium Association, 253 A.3d 383, 387–89 (R.I. 2021), the Rhode Island Supreme Court vacated an order appointing a temporary receiver for a condominium declarant. The petitioning unit owners were not shareholders of the declarant and had not established creditor status sufficient to support the requested receivership.
The Court explained that “the appointment of an equitable receiver is an extraordinary remedy available only in exceptional situations.” Id. at 387.
The decision concerned a receivership sought against the declarant. It should not be treated as a ruling that every dispute involving a condominium association, board, or unit owner presents the same standing question. The decision also preceded the enactment of the Rhode Island Commercial Receivership Act.
For a proposed receivership, we examine who seeks relief, against whom relief is sought, the nature of the claimed interest, and the particular property or business affairs to be placed under court supervision. For a party opposing appointment, we evaluate deficiencies in those elements, the availability of alternative remedies, and whether the proposed order extends beyond what the circumstances justify.
Rhode Island Receivership Attorneys for Lenders and Creditors
A lender’s position in a receivership depends on more than the amount owed. The relevant documents may include the note, mortgage, security agreement, financing statements, guarantees, assignments of rents, subordination provisions, and agreements among creditors.
Bilodeau Capalbo represents lenders and creditors in evaluating their rights before a receivership begins and throughout the proceeding. Our work may involve the grounds for appointment, protection of collateral, proposed operating arrangements, claims and lien disputes, sale procedures, objections, and distribution issues.
We review whether the proposed receivership addresses the property securing the client’s obligations and how the requested orders may affect enforcement rights. We also evaluate proposed borrowing, asset dispositions, operating expenses, and other actions that may affect the funds available for payment.
A secured claim, an unsecured claim, and a claim arising through a different level of financing should not be treated as interchangeable. Our analysis begins with the actual contractual and property interests rather than an assumption about priority or recovery.
Mezzanine Lenders and Competing Financing Interests
Our representation of a $90 million mezzanine lender in the Providence Place Mall receivership is part of the firm’s lender-side receivership experience.
In matters involving mezzanine financing or multiple financing arrangements, we examine the borrower structure, the collateral described in the loan documents, the rights granted under applicable agreements, and the relationship between the client’s position and other asserted interests.
We assess participation in the proceeding, proposed sale terms, valuation issues, requests affecting collateral, and any contractual restrictions relevant to the client’s proposed action. The objective is to identify and protect the client’s actual rights—not to assume that every lender holds a direct mortgage on the underlying real estate.
Our related creditor-rights practice addresses enforcement and collection issues that may arise before, during, or alongside a receivership.
Business Receiverships, Shareholder Disputes, and Asset Preservation
A business receivership may arise from financial distress, an ownership dispute, management deadlock, or allegations that assets are being diverted, misapplied, or placed at risk.
Our attorneys represent shareholders and other business participants in evaluating whether receivership relief is appropriate, responding to petitions, and addressing proposed orders affecting company operations and assets. The firm currently represents a shareholder in a body shop receivership.
Representation of a shareholder is distinct from representation of the company or the receiver. We identify the client’s ownership and contractual rights, the claims that belong to the business, and the issues affecting the client’s participation in the proceeding.
Relevant documents may include shareholder agreements, operating agreements, corporate records, financial statements, bank records, loan documents, leases, and records of distributions or related-party transactions.
Nonliquidating Receiverships
A receivership does not always require liquidation.
In Levine v. Bess Eaton Donut Flour Co., Inc., 705 A.2d 980, 983 (R.I. 1998), the Supreme Court stated:
“The appointment of a nonliquidating receiver for an ongoing, solvent corporation is an extraordinary remedy that should be reserved for extraordinary situations.”
The Court held that the statutory authority addressed in that case did not require a shareholder first to file a separate dissolution petition. Nevertheless, it affirmed denial of the requested receiver because the trial justice’s findings supported the conclusion that appointment would tend to create more harm than assistance. Id. at 983–84.
That distinction matters. Establishing that a court has authority to appoint a receiver does not establish that appointment is the appropriate remedy in a particular case.
We evaluate the danger to assets, the proposed operational changes, the anticipated expense, and the alternatives available through business litigation and negotiated ownership arrangements.
Commercial Condominium Receiverships and Board Representation
Receivership proceedings involving commercial condominiums require attention to governance, property ownership, financial obligations, and the scope of the proposed court intervention.
Bilodeau Capalbo currently represents a board of directors in a commercial condominium receivership. Our approach distinguishes the interests and authority of the board, the association, individual unit owners, lenders, and other affected parties.
We review the declaration, bylaws, deeds, assessment records, budgets, contracts, and relevant court orders. That review identifies the association’s property and contractual rights, the authority exercised by the board, and the interests held separately by unit owners or other parties.
A proposed receivership should not proceed on an unsupported assumption that the association owns every unit or every property interest in the building. The petition and proposed order must address the actual ownership and governance structure.
Our review may address who is authorized to make decisions, collect assessments, enter contracts, obtain financing, authorize repairs, or administer designated funds under the governing documents and any court order. We also assess whether the proposed authority is appropriately limited and how the proceeding affects the board’s continuing responsibilities.
These matters connect directly with our Rhode Island condominium-law practice and our representation in construction-related disputes.
Pre-Receivership Planning and Out-of-Court Workouts
Court supervision is not the only possible response to a distressed loan or business dispute. We evaluate whether a documented agreement can address the immediate problem while preserving the parties’ enforceable rights.
Pre-receivership planning may include reviewing defaults, financial information, collateral, ownership arrangements, cash requirements, and pending enforcement activity. We also identify whether the parties have a realistic basis for continued operations, refinancing, an orderly sale, or another negotiated resolution.
Our attorneys negotiate and prepare forbearance agreements, loan modifications, repayment arrangements, restructuring documents, and related settlement agreements. We address the proposed obligations, reporting requirements, conditions, deadlines, reservations of rights, and consequences of nonperformance.
A workout must account for the borrower’s ability to perform and the lender’s need for reliable information and protection of its position. A temporary agreement that leaves the central operational or financial problem unresolved may merely postpone the dispute.
We also evaluate alternatives involving an assignment for the benefit of creditors or another orderly disposition where appropriate. These alternatives require their own analysis and should not be treated as interchangeable with a court-appointed receivership.
Commercial Real Estate and Distressed Loan Restructuring
Commercial property receiverships require an understanding of the property’s operations as well as its financing.
Our review may include leases, rental income, operating expenses, maintenance needs, insurance, tax obligations, financing documents, and proposed capital expenditures. We assess how those matters affect preservation of the property and the client’s legal and financial position.
For lenders, borrowers, and investors, the available course may involve a negotiated extension, modification, refinancing, receivership, foreclosure, or sale. We evaluate the legal requirements and practical consequences of each available alternative rather than assume that one procedure is appropriate for every distressed asset.
Our commercial real estate practice supports the transaction and property issues associated with these matters. Our foreclosure practice addresses related enforcement issues for institutional and private lenders.
The Receiver’s Authority and the Court’s Continuing Oversight
The receiver’s authority must be evaluated against the governing statute and the appointment order.
For proceedings governed by the Commercial Receivership Act, R.I. Gen. Laws § 10-21-12 distinguishes powers exercisable without additional court approval, subject to applicable limitations, from actions requiring court approval.
The statute addresses collection, control, management, conservation, and protection of receivership property; ordinary-course business operations; assertion of the owner’s claims relating to receivership property; and requests for court instructions.
Court approval is required for specified actions, including borrowing outside the ordinary course, improvements, transfers outside the ordinary course, adoption or rejection of executory contracts under the applicable provision, compensation, and distributions.
Under R.I. Gen. Laws § 10-21-5, the appointing court has exclusive jurisdiction to direct the receiver and determine controversies related to the receivership or its property.
Our representation may include reviewing proposed orders, responding to requests for additional authority, addressing financial reports and budgets, and seeking instructions or other relief concerning disputed actions. The inquiry is what the receiver is authorized to do in the particular proceeding—not simply what a receiver has been allowed to do in another case.
Buying and Selling Assets in Receiverships
Receivership sales require close attention to the court-approved process.
We represent purchasers, investors, creditors, and other participants in evaluating proposed acquisitions and dispositions. Our review addresses the assets included, the proposed purchase agreement, due diligence, deposits, bidding qualifications, objection deadlines, required approvals, closing conditions, and treatment of asserted liens or other interests.
A purchaser should not assume that every receivership sale conveys the same rights or eliminates every potential claim. The proposed sale order, governing law, title information, and transaction documents must be examined.
For real estate, our analysis may include ownership, leases, access, recorded restrictions, liens, and the authority to convey the property. For operating businesses or personal property, we examine the assets and contractual rights actually offered for sale.
Credit Bids and Compliance With Bidding Orders
A secured creditor considering a credit bid must address the applicable law and the approved bidding procedures early in the process.
In Rialto Capital Advisors LLC v. Robert Day, LLC, No. PC-2020-06964, 2021 WL 6128309 (R.I. Super. Dec. 22, 2021), the Superior Court denied a secured creditor’s attempt to submit a credit bid after it failed to comply with the court-approved bidding timetable. The court confirmed the receiver’s recommendation of the highest and best offer received at auction.
The court observed that “our State’s practice has been for the secured creditor to file a motion prior to being permitted to submit a credit bid.”
That decision preceded the Commercial Receivership Act. The applicable statute and current orders must therefore be considered, rather than treating the older decision as a complete statement of every present bidding requirement. Its practical lesson remains important: a creditor should not assume that its asserted security interest excuses compliance with the sale process.
Claims, Alleged Asset Diversion, and Recovery Litigation
A receivership may involve disputed accounts, transfers, payments, or transactions requiring investigation. Whether a receiver may pursue a particular claim depends on the claim’s ownership, the applicable law, and the authority conferred in the proceeding.
In Forte, Jr. v. Faria, No. KC-2021-1045, 2023 WL 4539700 (R.I. Super. July 10, 2023), the Superior Court addressed a receiver’s standing to pursue claims under the Rhode Island Uniform Voidable Transactions Act. The court concluded: “Plaintiff has standing to assert a claim against Defendants under the RIUVTA.”
The holding concerned a receiver acting for entities that had themselves been harmed by the alleged fraudulent scheme. It should not be read as granting every receiver an unrestricted right to assert every creditor’s individual claim.
Our attorneys evaluate records, transactions, and the ownership of potential claims before determining the appropriate procedure. We also represent parties responding to claims or requests for relief arising from the administration of receivership assets.
Creditor Claims, Priorities, Expenses, and Distributions
Participation in a receivership requires attention to notices, filing requirements, and deadlines.
R.I. Gen. Laws § 10-21-20 addresses creditor notice, claims, and distributions in proceedings governed by the Commercial Receivership Act. Rule 66 and case-specific orders also require careful review.
We assist clients in preparing and supporting claims, identifying asserted security or priority, responding to objections, and reviewing proposed distributions. A claim should accurately identify its amount, basis, supporting documents, and any lien or other asserted entitlement.
The amount of a claim does not, by itself, determine the amount recoverable. The available assets, validity and priority of competing claims, authorized expenses, and applicable distribution rules require separate analysis.
Our review also addresses receiver and professional compensation, operating expenses, proposed settlements, and the effect of those expenditures on the estate. Court supervision and financial reporting provide important opportunities to identify issues before the assets are distributed.
Receivership Stays and Requests for Relief
A state-court receivership should not be described as though it were itself a federal bankruptcy case. The source, scope, and exceptions to any stay must be identified.
For proceedings governed by the Commercial Receivership Act, R.I. Gen. Laws § 10-21-14 provides that an appointment order operates as a stay of specified actions involving receivership property, subject to statutory exceptions or court order.
The statute addresses acts to obtain possession of or exercise control over receivership property, enforcement of judgments against that property, and certain lien-enforcement activity. It also permits additional injunctions where necessary to protect the property or facilitate administration.
A person affected by a stay or injunction may apply to the appointing court for relief for cause. A knowing violation can result in actual damages, reasonable attorney’s fees and costs, and civil-contempt sanctions under the statute.
We evaluate whether a proposed action is stayed, whether an exception applies, and whether relief should be requested before proceeding. Where a federal bankruptcy case also exists, its consequences and any required bankruptcy-court relief must be analyzed separately.
How Our Rhode Island Receivership Attorneys Approach a Matter
Our initial review focuses on the client’s role and the decisions that must be made.
For a lender, that may require immediate review of collateral, defaults, proposed court orders, and sale procedures. For a shareholder, it may involve governance documents, financial information, ownership rights, and the effect of continued operations or liquidation. For a condominium board, it may require examination of the declaration, association authority, designated assets, and the proposed scope of court intervention.
We organize the relevant documents, identify deadlines, and develop a position concerning appointment, administration, settlement, sale, or distribution. We also evaluate whether the requested relief is supported by the available evidence and whether a more limited approach would address the problem.
Throughout the matter, we consider litigation requirements alongside the practical consequences for the business, property, and client. Our objective is to protect the client’s rights through a strategy grounded in the documents, the financial circumstances, and the governing law.
Questions About Rhode Island Receiverships
Does a receivership necessarily mean that the business will close?
No. A receiver may be authorized to operate a business or preserve its assets rather than immediately liquidate them. The applicable law, appointment order, available resources, and subsequent court decisions determine the course of the proceeding. Rhode Island’s corporate statutes expressly recognize nonliquidating receivership relief in appropriate circumstances.
Can a lender or shareholder oppose a proposed receivership?
A participant’s ability to seek or oppose particular relief depends on its legal interest and the proceeding involved. Our attorneys evaluate standing, the proposed grounds for appointment, alternative remedies, and the scope of the requested order. Appointment is not automatic merely because a petition has been filed.
Can a creditor continue collection or foreclosure activity after appointment?
That question requires review of the applicable stay, appointment order, statutory exceptions, and the proposed action. A creditor should not assume that holding a security interest permits it to disregard restrictions affecting receivership property. Relief from the appointing court may be necessary.
What should I provide for an initial consultation?
Provide the petition and existing court orders, hearing notices, relevant loan or ownership documents, financial information, and correspondence concerning the dispute. For real estate or condominium matters, deeds, declarations, bylaws, leases, budgets, and assessment records may also be important. Identify any pending sale, objection, claim, or hearing deadline at the outset.
Speak With a Rhode Island Receivership Attorney
Bilodeau Capalbo, LLC represents parties seeking to protect their interests in Rhode Island receiverships, distressed-business matters, loan workouts, and court-supervised asset transactions.
Our experience includes representation of a $90 million mezzanine lender in the Providence Place Mall receivership, current representation of a board of directors in a commercial condominium receivership, and current representation of a shareholder in a body shop receivership.
Whether you are considering a receivership petition, responding to a proposed appointment, protecting a lending or ownership interest, or evaluating an asset acquisition, our attorneys can review the matter and discuss the available options.
Call 401-300-4055 or contact Bilodeau Capalbo, LLC to discuss your Rhode Island receivership matter.
This page provides general information and does not constitute legal advice or create an attorney-client relationship. The availability and scope of receivership relief depend on the applicable law, governing documents, evidence, and court orders. Prior representations do not guarantee a similar outcome.