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Resolute Completes Wind-Down of 80-Year-Old Law Firm, Managing $7.3M in Receivables and High-Stakes Lien Litigation

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Resolute Completes Wind-Down of 80-Year-Old Law Firm, Managing $7.3M in Receivables and High-Stakes Lien Litigation

Engagement Type
Receivership

When an 80-year-old Arizona law firm ceased operations, Resolute was appointed as Receiver to manage $7.3 million in receivables, oversee trust account reconciliations, and navigate a complex lien dispute through final court disbursement.

Background:

Jennings, Strouss & Salmon, P.L.C. (“JSS”), a respected Arizona-based law firm with over 80 years of operation, ceased operations in August 2023. As a secured lender sought to preserve value and ensure orderly recovery of outstanding receivables, Resolute was appointed by the Maricopa County Superior Court as Receiver on August 22, 2023.

Challenge:

Upon appointment, Resolute faced a unique and sensitive engagement involving:

  • Over $7.3 million in outstanding accounts receivable (with a majority over 120 days past due)
  • Tangled legal and lien disputes between a national bank and a landlord, impacting claim priority
  • A firm shutdown environment, including client trust accounts, privileged data, and systems shutdown risks
  • The need to wind down operations efficiently while balancing legal, ethical, and operational obligations

Strategy Implemented:

Resolute executed a multifaceted wind-down strategy tailored for a professional services firm:

Operational Transition:

  • Retained two key JSS employees on a short-term contract to optimize receivables collection during the initial phase.
  • Systematically exited costly software licenses and avoided unproductive collection costs by year-end.

Accounts Receivable Management:

  • Created a detailed collection system via QuickBooks and manual oversight.
  • Collected over $1.8 million in receivables while minimizing administrative spend.

Legal Strategy & Lien Dispute Navigation:

  • Worked in coordination with legal counsel during a complex lien priority dispute between two parties.
  • Supported the successful ruling at the Arizona Court of Appeals in early 2024, which confirmed the bank’s first-position lien. As of April 2024, the opposing party had filed a petition for review with the Arizona Supreme Court.

Financial Oversight:

  • Managed four legacy trust and operating accounts while establishing a new estate account at Western Alliance Bank.
  • Returned over $150,000 in client trust funds to proper parties and transitioned reconciliations to JSS.

Interim Results

  • $3.6 million total receipts during the receivership, including retained funds, A/R collections, and refunds.
  • Operational expenses remained lean at under $1 million, with all records made available for audit and tax reconciliation.
  • Over $2.2 million disbursed to the secured creditor (per court order) as part of the final liquidation steps in May 2024.
  • Remaining stale receivables and a unique ALAS insurance policy were properly transitioned for post-receivership handling.

Final Results

As of July 31, 2024:

  • All economically viable receivables were collected.
  • The estate maintained a closing balance of approximately $309,000, pending final court-directed disbursement.
  • Resolute finalized its role, provided court-mandated transparency, and closed out the estate with professionalism and financial discipline