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Problems with management company

Discussion in 'Commercial Snow Removal' started by silvetouch, Jan 14, 2010.

  1. silvetouch

    silvetouch Senior Member
    Messages: 336

    Anyone ever deal with management companies appointed as receiverships?

    I had a couple of properties at the beginning of the season that are now managed by a new company appointed as a receiver. The new company does not like our prices and says that they don't have to give me the 30 day notice that the contract states because they are a receiver and they can basically do what they want.

    anyone have any experience with this?
  2. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    No but it seems legit, call your attorney...........
  3. silvetouch

    silvetouch Senior Member
    Messages: 336

    i've talked to multiple attorneys and all have some sort of different view on it. seems to be a grey area.
  4. Bajak

    Bajak Senior Member
    Messages: 999

    Might be because they know the case won't be lucrative for them. Lawyers are funny that way.;)
  5. Rickslawn

    Rickslawn Junior Member
    from midwest
    Messages: 20

    are these properties bankrupt or going bankrupt?

  6. silvetouch

    silvetouch Senior Member
    Messages: 336

    i don't think they are bankrupt or in foreclosure...The order from the U.S. District court says that the mortgage company is asking for a receiver to be appointed to take over the properties in place of the original management company. No mention of foreclosure or bankruptcy. Also, properties are section 8, and occupancy is at a pretty good rate. 1 attorney says that this can take place because of misappropriation of funds.
    1 part of the court order states that "The new Property manager and / or Receiver may enter into, extend, modify, terminate and /or enforce leases and other contracts in connection with the mortgaged property in the ordinary course of business.........."

    my thought on that is that so could the original management company, but they also have to do it within the terms and conditions of the contract. It seems to me that it's saying that the old management company is out and this new 1 is in. And the contract states that either party may cancel the contract with a 30 days notice.
    What the point of contracts if they don't mean anything???
  7. Brant'sLawnCare

    Brant'sLawnCare PlowSite.com Addict
    Messages: 1,756

    That must be a tough situation. Are you paid up to date so far? If so, you might want to get out before you do work for them and they don't pay you.
  8. silvetouch

    silvetouch Senior Member
    Messages: 336

    nope.... haven't been paid once since new management went into place. i got 1 of 5 payments from the original company and no salt payments yet.
  9. Brant'sLawnCare

    Brant'sLawnCare PlowSite.com Addict
    Messages: 1,756

    That's not good. Sounds like you need to get out once you get paid in full.
  10. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    what kind of money are we talking? if this seems to be going south, i would make very clear to the new management company, you intend to pursue this in court, or they could accept the 30 day clause (pay a little more) then leave on good terms, OR they can fight it, and pay the court costs as you take them to court. personally to me reason would dictate that even if they don't agree with the price, it can't be worth the legal fees to fight this, (i realize you may be playing a game of bluff with them as you may not bother taking them to court, but they don't know that, and for them, if you have been providing a quality service, what is a couple hundred extra dollars vs a legal battle where they would have to hire a lawyer)
  11. silvetouch

    silvetouch Senior Member
    Messages: 336

    it is definitely worth going to court. My contract also states that they are responsible for all court costs, attorney fees, and any other reasonable fees related to collecting moneys owed on the contract. This lady for some reason thinks that the whole receivership thing completely voids this contract and she can do whatever she wants.
  12. WIPensFan

    WIPensFan PlowSite Veteran
    Messages: 3,594

    You should make peace with them.:angel:
  13. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    again i well say that if you state that they would be better off having you complete the month, and not go through the legal proceedings, i would hope they would see it would be better to follow your 30 day out, and pay you up.
  14. Bajak

    Bajak Senior Member
    Messages: 999

    She might be right. I found this. C&P it for you.

    The case law surrounding receiverships clearly and repeatedly demonstrates that the receiver's powers in operating the estate are extraordinary and virtually only limited by the district court judge's concept of equity. Some key receivership powers include:

    1. 1. In appropriate circumstances a receiver may sell receivership property free of liens of third parties.
    2. 2. The court appointing a receiver may enjoin actions against the receivership estate to assist in the efficient administration of the receivership estate (similar to an automatic stay).
    3. 3. The receiver may sue defendants from all over the country (and in foreign countries) in the court where the receivership action is pending.
    4. 4. A receiver has the power to sue on behalf of entities which participated in the fraud once the entity is no longer under the spell of the "evil zombie" (i.e., the individual who ran the fraud).

    I think it could get ugly if you get on the bad side of the receiver. Your contract may have been signed by a guy committing fraud. That would make the contract null and void. She may not be allowed to divulge details but stay on her good side and try to find out what you can. You may have to negotiate another contract or walk away.

    Here's a link to a PDF book, you can read it online or download it for free.

    Scroll down to page 73 and read that page to see if you can/do meet the criteria.
  15. silvetouch

    silvetouch Senior Member
    Messages: 336

    I spoke to an attorney at the firm that wrote that book earlier. They said its a very grey area without actually seeing the court order for the receivership. She said she could review it for $185 / hour. I'll see what my regular attorney has to say about it 1st.
  16. Bajak

    Bajak Senior Member
    Messages: 999

    I kinda lucked out finding that book being written by a lawyer in your area. I might ask the lawyer if you could lien the property should the receiver decide to sell. I wouldn't think they would sell since it is occupied, but you never know.

    I don't have any direct experience with receivership and hope I never do. It is an ugly situation and people get hurt along the way. I hope it works out for you. Please keep us posted. It can happen to any of us and your story will hopefully give us some insight.

    Again, best wishes and good luck.

  17. plowking35

    plowking35 2000 Club Member
    from SE CT
    Messages: 2,923

    You have to find out why they are in recievership.
    But once in appointed recievership they can void all previous contracts on the spot. You are no longer working for the people you had the contract with, thus contract is worthless.
    I worked with a recievership company last year and got paid every dime, in fact the State of CT who appointed the reciever guarenteed the payments.
    For me it was a good relationship.
  18. silvetouch

    silvetouch Senior Member
    Messages: 336

    I have a copy of the U.S. district court judgment, but it doesn't say anything about why they are in receivership; only that the mortgage company asked the court to appoint 1 and that it was granted. There has to be some law that make someone responsible somewhat for this contract or what good are contracts? It's kind of like having criminal laws, but no courts to uphold them. This was a seasonal contract and i have set payments that i pay my guys to plow these specific properties, to mention the 150-200 tons of salt that i have already bought to make sure these properties are taken care of. If i didn't show up to plow these properties, i would be getting sued right now. I can't seem to find any cases that are similar when i search for court cases. I need to find "pre-receivership contracts" disputes.
  19. mtk469

    mtk469 Member
    Messages: 57

    I have been involved with a couple of different receiverships and I was told up front or before it happened ( if during the middle of an exsisting contract)

    1> All previous contracts are void.
    2> Each invoice was guaranteed but must be sent with a lein waiver stating that what your are billing is the only thing currently owed to you and that nothing further would be owed until the next billing and that you where releasing them from any lien holding.

    I would suggest you try and find out why the receivership took place and who appointed it. If you can't get anywhere with the current person then go over there head if possible.

    Good luck, hope it works out for you
  20. silvetouch

    silvetouch Senior Member
    Messages: 336

    i did a search for the property just now and came up with the following below: so apparently it is in some type of foreclosure. I know for a fact that money is coming in. Maybe they just spend too much money? maybe they just didn't pay their mortgage? but i saw their vacancy and occupancy charts when i was in the office, and its actually very good and its a section 8 property, so its guaranteed $$. i found some other sites that basically said that "pre-receivership contracts" are NOT necessarily terminated, but none of them actually say they are. I can't seem to get a definite source.
    Can the original company be held accountable?