By Rob Weiman
Asset managers are regularly faced with the liquidation of hard to sell assets, and can find themselves in a quandary.
They often find themselves looking a some odd thing, scratching their head wondering, “what the heck is it?” Their next thought is, “If I don’t know even know what it is or what it does, how in the world am I going to sell it, for that matter how am I going to find someone who whats to buy this thing?”
When liquidating assets, think asset liquidation auctions.
Whether you have a business that needs to voluntarily wind up its affairs and dissolve, or a business that is under court order to do so the result is often the same. You get called into liquidate the company, and there you are. You know they borrowed money from your institution, but that does not mean you know anything about that business or the odd things they used to make money. You don’t have time to stand there and learn a new business, you have other accounts in your portfolio to tend to, so what do you do? You call a specialist who knows about business liquidations, appraising, and assets of all types, you call an auctioneer.
Auctioneers are skilled at many things, some are great at benefit auctions, some are out of this world at selling cattle and other livestock, some are great at estates, but when you are winding-up a company they might not be your best choice.
In a liquidation or dissolution auction you need to look for these 4 things
- Do they have experience in your vertical (that is in the vertical of the business you are winding up) and if not, do they have the connections to partner with someone who does. If you need to dissolve a factory with DNC equipment it might help if your auctioneer knows the difference between an Allen Bradley SLC500 and a PLC-5, a MMI and CNC. You can know all there is to know about marketing cattle and be completely in the dark in this case.
- Do they offer appraisal services, and if so are their appraisals USPAP compliant? The Uniform Standards of Professional Appraisal Practice (USPAP) is a must have. If your appraiser is ever questioned in court, and their appraisal isn’t compliant with USPAP the judge will likely throw it out.
- Do they offer online bidding? It may a online only option or a blend of online and in-person, but you should be talking with an auction that at least offers you an online option. Not all liquidation auctions lend themselves to online but many times it is the best option and sometimes it is the only what to go. If the auctioneer you are looking at does not offer online auctions in one form or the other, move on.
- How safe is your auctioneer? While safety is always an issue in auctions, it is crucial to hire an auction company that understands industrial safety. It won’t help your bank if the auctioneer gets you 10% but has someone get hurt because they are unsafe. Do they have proper safety gear for employees? Do they understand things like confined space and the training it takes for employees? Do they have access to and understand the importance of trained riggers? Nothing will spoil a good auction like someone getting hurt.
Follow these 4 tips and you are on your way to a successful dissolution.
Rob Weiman, CAI, GPPA, AARE, ATS, CES is a Graduate of the National Auctioneers Association’s (NAA) Certified Auctioneer Institute, A Graduate Personal Property Appraiser, and Accredited Auctioneer of Real Estate and a Certified Estate Specialist. He is a member of the NAA’s Educational Trustee Institute, and the President Elect of the Missouri Professional Auctioneers Association. He has a BS in Computer Science and has previously held a license as a Master Electrician. He has worked for Boeing, Lockheed Martin, McDonnell Douglas, Paylinx and Cybersource as well as the US Army and has held security clearances up to TOP SECRET CRYPTO COSMIC, SBI-SI-TK.