Receivership is a commonly used practice in Rhode Island to liquidate the assets of a troubled business under the supervision of the Superior Court. Receiverships are state court proceedings that differ from Chapter 7 Bankruptcy cases in many procedural and practical ways. In a typical Receivership, the Superior Court appoints a Receiver to act as an agent of the court to liquidate the assets of a Corporation, Partnership, Limited Liability Company or Limited Liability Partnership.  Once the assets are liquidated, creditors are paid from the sale proceeds.

Individuals are not eligible for Receivership and there is no discharge of debt as there is in Bankruptcy. Receivers are also appointed is cases involving shareholder, partner or member disputes where management has become deadlocked.

The choice to file receivership or bankruptcy for your business is an important financial decision that requires advice from experienced legal counsel.