When a bank takes over a running business... (see details)

Question

I work for a hotel that went into foreclosure a few months ago. The owner was unable to get additional financing, we now are ran by a court appointed receiver. It is independently owned, and we were told today to do an inventory of everything down to pencils, and people would be in tomorrow to do this for everything. The bank is taking over on Friday, what usually happens with this situation? We are a struggling, deteriorating property that isn't making much money. Do you think they will close the doors?

Answer 1

Unfortunately, the bank will be looking to recoup its money. They may choose to keep the business running, if they have figured a way to turn the profit margin around, because they can then sell it for more money. Most likely, they are doing the inventory to prepare for an auction. That will come shortly after closing the business, which will probably ocurr shortly after the bank takes over on Friday.

I would start looking for a new job as soon as possible. You will probably qualify for unemployment, so don't forget to check into that. Good luck to you, I hope everything works out for you.  

Answer 2

unfortunately it is time to find a new job.

Answer 3

The way you put it, most likely the bank is going to close the business and sit on the property until it's sold.

Banks only keep business running if they make money. And not just some money, they compare capital invested and profit. If the value of the business can get more profit in some shady business in Nigeria (just an example), the business is sold and the money sent to Nigeria.

Sorry about that. The other answer is right, time to look for a new job. Severance packages don't last forever.

Answer 4

It is hard to say as to whether or not they will close the doors.  They are going to do a complete examination of the business and apparently they are starting with inventory.  They will also check to see if the business is profitable and if it isn't you can expect them to close it, sell off assets because the bank is going to get their money.