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Paul Tracy

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Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated August 5, 2020

What is Receivership?

Receivership is a form of bankruptcy in which a court-appointed trustee reorganizes the bankrupt entity.
 

How Does Receivership Work?

In a receivership, a receiver takes custody of the company's property and operations. A court appoints the receiver.

The receiver's job is to pay down as much debt as possible. This usually means selling company assets, laying off employees and liquidating inventories.

Why Does Receivership Matter?

Companies that are in receivership are at the mercy of the receiver. In fact, the receivers control the company, making decisions large and small, and the receivers have court-appointed authority to do so. Accordingly, companies that are in receivership are usually on their last legs.

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