Definition ∞ Receivership costs encompass the expenses incurred during the legal process of receivership, where a court-appointed individual or entity manages a company’s assets to preserve value for creditors. These costs typically include legal fees, administrative expenses, and compensation for the receiver’s services. Such expenditures are prioritized and paid from the company’s assets before other claims. They are a direct financial consequence of insolvency or mismanagement.
Context ∞ In the aftermath of high-profile cryptocurrency exchange failures or protocol insolvencies, receivership costs become a critical factor in determining the ultimate recovery for affected users and creditors. These costs can be substantial, often diminishing the remaining asset pool available for distribution. The legal complexities of liquidating digital assets across various jurisdictions can further inflate these expenses. Transparency regarding receivership costs is a significant point of contention for claimants seeking restitution.
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