Maximizing Value: When and Why Receivers Should Hire Investment Bankers by Tom Goldblatt

Imagine stepping in as a court-appointed receiver for a distressed company. You’re tasked with selling assets to satisfy creditors – a high-stakes challenge under tight scrutiny. How do you ensure you’re getting the best deal possible? The answer often lies in enlisting an investment banker to quarterback the sale process. Bringing in a seasoned investment banker can transform a risky, complex sale into a structured, competitive auction that maximizes value and withstands court scrutiny. In fact, experienced sellers know that going it alone is usually a mistake – akin to representing yourself in court and virtually guaranteeing the other side a win.

In this article, we highlight why hiring an investment banker is typically the smart move for a receiver, and we briefly address the rare situations where a receiver might proceed without one.

Key Reasons to Hire an Investment Banker

• Maximize Sale Value: Investment bankers drive up the sale price by orchestrating competitive bidding processes forcing buyers to put their best offers on the table. A study of over 4,000 private company sales found that sellers using M&A advisors achieved roughly 25% higher valuations than those without one.¹ This explains why 99% of institutional sellers hire bankers—even the most experienced players recognize the value.¹ Competition among bidders not only boosts price but also improves deal terms (better payment structures, fewer contingencies) and accelerates closing timelines.

• Access to a Broader Universe of Buyers: Investment bankers bring a wide network of industry contacts and insight into the “hidden” buyer pool. They access strategic buyers in adjacent industries, private equity funds, family offices, and international bidders you may not know exist. This broad exposure creates a competitive market that wouldn't materialize through a quiet sale to one or two parties. More interested buyers generate competitive tension, translating into higher prices and better outcomes for the receivership estate.

• Deal Expertise and Negotiation Skills: Selling a business or a pool of assets is complex, often involving intricate deal terms, due diligence traps, and tactical negotiations. Investment bankers specialize in managing the M&A process; preparing persuasive materials, valuing assets realistically, and keeping buyers engaged. Crucially, they also know the tricks buyers use to chip away at value. Their expertise helps level the playing field, ensuring that you (as the receiver) aren’t outmaneuvered by sophisticated buyers. Investment Bankers serve as the deal quarterback, leading the team of lawyers, accountants, and the receiver through each play of the transaction. This expertise often determines whether a deal closes on favorable terms or falls apart. As one commentator noted, handling a sale without an investment banker is like entering a high-stakes legal battle without a lawyer; it usually ends poorly for the side without professional guidance. ²

• Efficiency – Focus on Your Mandate: Running a sale process requires hundreds of hours to solicit buyers, answer due diligence questions, and maintain momentum. Attempting this alone detracts from a receiver's core duties of managing and preserving the estate. Investment bankers handle the heavy lifting—preparing materials, fielding questions, and chasing bids—allowing receivers to focus on operations and administrative tasks. This division of labor keeps the business stable and minimizes operational slippage. The banker's full-time attention also keeps deals on schedule, critical in distressed situations where delays erode value. Receivers retain control over major decisions while benefiting from expert project management throughout the sale.

• Credibility and Stakeholder Confidence: Engaging an investment banker adds credibility to the sale process. It signals to courts and creditors that the receiver is maximizing value professionally and tells buyers the sale is serious and competitive—not an insider deal or fire sale. This transparency is critical in receiverships, where a banker ensures the process withstands stakeholder scrutiny. Courts have emphasized that a receiver's duty is to achieve a fair price through a diligent, well-exposed sale process. ³ Using an investment banker aligns with that duty by making the process more transparent and market driven. In short, a banker helps instill confidence that the outcome will be the best obtainable result under the circumstances – which can protect the receiver from later criticism or legal challenges about whether the assets sold for too little.

  
  

• Higher Probability of a Successful Closing: Hiring an investment banker materially increases the likelihood of closing successfully. With multiple buyers at the table, if one deal falls through, the banker pivots to other interested parties, avoiding dead ends. Their experience spotting and resolving issues prevents deals from derailing during due diligence or documentation. Statistics confirm this: one study found that banker-guided transactions not only achieved higher valuations but also closed more reliably with less value erosion. ⁴ For receivers converting assets to cash efficiently, this reliability is invaluable. Failed sales or drawn-out processes can be disastrous in receiverships, causing mounting expenses and declining asset values. Engaging a banker dramatically improves the odds of reaching an optimal deal.

In sum, an investment banker brings a combination of market reach, expertise, and process discipline that almost always yields a better outcome for the receivership. The banker’s fee is an investment toward a higher return. Indeed, the premium obtained in price (often well above 25%) typically far exceeds the cost of the banker’s commission, making it a high-ROI decision for the estate.¹ Virtually every seasoned fiduciary – be it a private equity seller or a bankruptcy trustee – employs professional investment bankers in significant asset sales, because they know the value added is real.

Rare Situations Where a Receiver Might Not Hire a Banker

Are there instances when a receiver would not hire an investment banker? Only in rare and exceptional cases. For example, if the receivership estate’s assets are extremely small or simple (say, a single piece of real estate or a fixed piece of equipment with an obvious local buyer), the cost of hiring a banker might outweigh the incremental value gained. Or if a buyer was pre-identified (perhaps the secured creditor or a part-owner is poised to purchase the assets at a fair price), a full marketing process might be unnecessary. In such straightforward scenarios, a receiver might work with an auctioneer or broker instead or simply seek court approval for a private sale. However, these situations are the exception, not the rule. Even then, the receiver must be confident that the price is fair and that the sale will close smoothly. In most cases, foregoing a banker is a gamble that could leave money on the table.

Ultimately, a receiver’s mandate is to maximize the value of the estate for the benefit of creditors and stakeholders. Hiring an investment banker is often the single best step to fulfill that mandate when assets are being sold. It aligns the receiver with specialized expertise and market access that are difficult to replicate otherwise. It also provides a measure of protection – showing the court and creditors that the receiver ran a thorough, professional process to get the best deal available. Given the high stakes and fiduciary pressures receivers face, having a trusted investment banker by your side can turn a daunting responsibility into a well-managed success.

Bottom line: when in doubt, bring in a banker to ensure you, as the receiver, leave no stone unturned in delivering the highest value outcome. Your creditors (and the judge overseeing the case) will thank you for it.

Footnotes

1. See R. Christopher Small, Does Hiring M&A Advisers Matter for Private Sellers?, Harv. L. Sch. Forum on Corp. Governance (May 13, 2014) (summarizing a University of Alabama & Portland State University study finding ~25% higher valuations for private companies that used sell-side advisors and noting that ~99% of transactions by institutional sellers in the dataset involved an outside advisor).

2. Michael N. Mercurio, Don’t Use an M&A Attorney for an Investment Banker’s Job, Offit Kurman Blog (July 11, 2024) (analogizing the mistake of attempting a DIY business sale to “representing yourself in court” and emphasizing the value of experienced deal advisors). ↩

3. See, e.g., Michele L. Schechter, Asset Sales in Receivership: A Practical Guide for Professionals, DailyDAC (Aug. 25, 2025) (emphasizing that a receiver must conduct a competitive and credible sales process to maximize value and obtain court approval of the sale). ↩

4. See Benchmark International, The Value of Hiring an M&A Advisor (May 23, 2024) (citing Northern Trust Business Advisory Services data analysis of 4,316 transactions, which found that sellers represented by an investment banker obtained an average EBITDA multiple 1.5× higher than those without, with less variability in outcomes). ↩