By: Richard Ormond
What Is a Receiver?
A receiver is a court-appointed officer that acts as a “neutral” to manage assets (real property or personal property) or even manage businesses as going concerns when they are the subject of a legal dispute. A receiver can also be appointed to act as a liquidator of such assets or businesses. A receiver’s primary role is to efficiently preserve assets in trust for all creditors.
Receivership is a legal remedy that exists in federal and state courts and provides an aggrieved party the option of placing an asset or business into legal custody, meaning that the court dispossesses the party in control of that asset or business and puts it into the hands of a court-appointed agent the receiver.
Technically, the receiver is an officer of the court whose authority is derived through the equitable powers of that court. In federal court, the appointment of a receiver is authorized by Fed. R. Civ. P. 66; in state court, it is authorized under both common law and statute. Receivers are, by the nature of their appointment orders, fiduciaries of the court much like a trustee in a bankruptcy context. As a result, actions taken by the receiver are seen as actions by the court.
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