Can I buy a business's assets directly from a struggling owner instead of waiting for a formal receivership?

Yes, buying directly from an owner who hasn't yet gone into formal receivership or bankruptcy is legally possible and happens often, but it comes without the protections a formal, court-supervised process provides. There's no vesting order clearing prior claims, and if the business later ends up in bankruptcy or receivership anyway, the sale could potentially be challenged and unwound as a preference or a transfer at undervalue, especially if the price looks low or you had some knowledge of the seller's financial trouble at the time.

Solid due diligence, appropriate representations and warranties, and lien and security searches matter even more in this kind of purchase precisely because none of the formal insolvency protections are available to fall back on. Weigh the lower cost and simpler process of a direct purchase against the reduced certainty compared with a formal, court-approved sale, and get legal advice on structuring the deal to minimize the risk of a later challenge.