Business Judgment · Composite scenario · illustrative
Business Judgment Against an Active Operating Company
A $725K judgment against an operating business with revenue but resistant ownership. Receivership-in-aid-of-execution becomes the lever.
Underwriting Thought Process
- • Revenue exists; controllers are deliberately suppressing distributions and obscuring banking.
- • Garnishment and levy are inadequate without information.
- • Receivership economics work because expected recovery is large relative to receiver fees.
File Facts
- Amount
- $725,000
- Entity
- Active LLC; observable revenue; opaque banking
- Owner posture
- Non-cooperative; missed exam attempts
Outcome
Receiver-in-aid-of-execution appointed with limited purpose to install cash controls; substantial recovery over 14 months; receiver discharged at conclusion.
Takeaways
- • Receivership is expensive but unmatched when the debtor controls information.
- • Match remedy to obstruction.
- • Use limited-purpose receivers when general receivership is overkill.