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