4.2: Receivership Management
Receiverships are managed to maximize net return toward an orderly and timely termination. Other Information:
Means & Strategies: The oversight and prompt termination of the receivership preserves value for the uninsured depositors
and other receivership claimants by reducing overhead and other holding costs. When the FDIC is appointed receiver, the FDIC
establishes an action plan for each receivership that is executed by a team of asset, marketing, finance and legal staff in
support of the receivership. Once appointed receiver, the FDIC immediately works to identify and notify potential creditors
of the failed insured depository institution about the failure and the process for submitting claims against the receivership.
Receivership liabilities include, for example, secured creditors, unsecured creditors (including general trade creditors),
subordinated debt holders, shareholders of the institution, uninsured depositors, and the insurance fund as subrogee. The
FDIC reviews the validity of each claim and determines a suitable resolution. In order to fulfill its responsibilities to
creditors of the failed institution, the FDIC, as receiver, manages and sells the assets through a variety of strategies and
identifies and collects monies due to the receivership. The FDIC’s goal is to expedite the return of assets to the private
sector by marketing most of the assets soon after an insured institution fails. Returning assets to the private sector quickly
allows the FDIC to maximize net recoveries and to minimize any disruption to the local community. The FDIC uses a number of
information technology applications, including Internet auctions, to facilitate the management and marketing of assets. A
list of loans and real estate for sale is available on the FDIC’s Web site, www.fdic.gov. Receivership staff provides oversight
and monitors the execution of individual receivership action plans. Once all assets have been disposed of, all liabilities
resolved, and no material financial or legal risks to the FDIC remain, a final distribution to the receivership’s creditors
is made and the receivership is terminated. External Factors: A severe economic downturn could lead to an increased number
of institution failures, and experienced staff might have to be diverted from other work to handle closings on a priority
basis. Such a diversion of staff might affect the pace at which the FDIC markets assets and terminates receiverships. Economic
and other factors could affect the achievement of specific targets expressed in annual performance plans. For example, factors
such as litigation and receivership properties being tainted by environmental contamination could delay the termination of
a receivership.
Indicator(s):
|
