When Should a Receiver Hire an Investment Banker?

By Tom Goldblatt, Managing Partner, Ravinia Capital

You've been appointed receiver. The estate's biggest asset is an operating business that needs to be sold. The clock is running, the lender is watching, and the court expects a result that holds up.

Many receivers run the sale themselves. I understand the instinct — you’re capable, you know the case, and the estate is cost-sensitive. But in most situations, that choice leaves money on the table. Here’s why.

Competition drives price. A banker creates competition.

One buyer negotiating against an unrepresented seller is not a market. It's a discount window.

A banker’s job is to put multiple credible buyers at the table and make them compete. The data backs this up: a study of more than 4,000 private company sales found that sellers who hired an M&A advisor achieved roughly 25% higher valuations than those who didn’t.¹ The most sophisticated sellers already know this — in the same study, 99% of sales by institutional sellers used an outside banker.¹

The people who sell companies for a living don’t sell without one. That should tell you something.

You don’t know the buyers you don’t know.

The obvious buyers — the competitor down the street, the party your lender suggests — are rarely the best buyers. The best price often comes from a strategic in an adjacent industry, a private equity fund with a platform to build on, or a family office you’ve never heard of.

A banker who works these markets every day knows where those buyers are. More buyers mean more tension. More tension means more dollars for creditors.

Buyers are professionals. Be represented by one.

Distressed buyers are good at this. They retrade. They chip at price through diligence. They slow-walk when delay favors them. An experienced banker has seen every one of these moves and knows the counters.

Selling without a banker is like representing yourself in court.² Opposing counsel couldn’t be happier.

Your time belongs to the estate.

A real sale process takes hundreds of hours — marketing materials, buyer outreach, the data room, diligence, negotiations. Every hour you spend chasing bids is an hour not spent preserving the estate and managing the case.

Delegating the process keeps the business stable and the sale on schedule. In distressed deals, time is value. Delay erodes both.

The process protects you.

For a receiver, this may be the most important point. Your sale will be scrutinized — by the court, by creditors, possibly by litigants later. Courts expect a competitive, credible, well-exposed sale process.³ A banker’s marketing record — who was contacted, who signed NDAs, who bid — is your best evidence that the price was fair and the result was the best obtainable.

When someone asks why the company sold for what it did, “we ran a full process with a professional bank and this was the market’s answer” is a much better sentence than “I called a few people.”

Deals close more often.

When one buyer walks, a banker pivots to the underbidders instead of starting over. Banker-led transactions don’t just price higher — they close more reliably, with less value erosion on the way to the finish line.⁴ For a receiver converting assets to cash, reliability is the whole game.

When you might not need one

Honesty matters here. If the asset is small and simple — a single property, a piece of equipment with an obvious local buyer — a banker’s fee may outweigh the benefit. An auctioneer, a broker, or a court-approved private sale may be the right call.

Those are the exceptions. If the asset is an operating business or anything with real complexity, the math almost always favors a full process.

The bottom line

Your mandate is to maximize value for creditors. A banker’s fee isn’t a cost to the estate — the price premium from a competitive process has typically far exceeded it.¹ And the process record protects you when the result is questioned.

When in doubt, run a real process. The creditors get more money, and you get a record that holds up.

Sources

1. R. Christopher Small, “Does Hiring M&A Advisers Matter for Private Sellers?” Harvard Law School Forum on Corporate Governance (May 13, 2014), summarizing a University of Alabama and Portland State University study of more than 4,000 private company sales.

2. Michael N. Mercurio, “Don’t Use an M&A Attorney for an Investment Banker’s Job,” Offit Kurman (July 11, 2024).

3. Michele L. Schechter, “Asset Sales in Receivership: A Practical Guide for Professionals,” DailyDAC (Aug. 25, 2025).

4. Benchmark International, “The Value of Hiring an M&A Advisor” (May 23, 2024), citing Northern Trust analysis of 4,316 transactions finding sellers represented by an investment banker obtained an average EBITDA multiple 1.5x higher, with less variability in outcomes.