What is a Receiver?
A Receiver is an independent third party who main responsibility is to preserve the underlying assets involved in some sort of legal action such as a foreclosure, bankruptcy or corporate dissolution.
Who Appoints a Receiver?
A receiver is appointed by a court at the request of a plaintiff who has filed one of the legal actions mentioned above. The plaintiff may be concerned that the owner of the assets and subject of the legal action sis not doing their best to preserve and maintain the underling assets and feels that an independent third Party might better serve the plaintiff’s interests.
Who does the Receiver work for?
The Receiver is appointed by the court and works for the court. The Receiver is obligated to work independently and not in the interests of either party to the underlying legal action.
Who selects the Receiver?
The court appoints the Receiver. The plaintiff, the lawyers or the judge may have any number of people that they will consider but it is ultimately up to the judge to make the decision as to who will serve as the Receiver.
What are the duties of a Receiver?
The Receiver is an Officer of the Court and is thereby required to be totally independent, neutral and fair is their actions and decisions. The Receiver typically takes control of the assets that are the subject of the lawsuit and is responsible for maintaining them and the underlying values. The Receiver is also required to make a monthly report to the court about his actions during the month, the property, the other assets and any issues that have arisen.
What is a Receiver’s Compensation?
The Receiver sets their own compensation schedule which must be approved by the Court and is disclosed prior to their appointment. The receiver will file a monthly comprehensive invoice which, prior to payment, must be approved by the court and is subject to challenge by either party.
Who Compensates a Receiver?
The Receiver is typically compensated from the assets which is the subject of the Receivership unless other arrangements have been made and approved by the court.
To whom does a Receiver Report?
The receiver works for the court and is considered an officer of the court.
Does a receiver need legal counsel?
Any business can become involved in many different kinds of situations which may require an attorney. Not every question facing the Receiver would need the advice of an attorney. However, having a trusted attorney available is well advised.
What types of problems does a Receiver encounter?
A Receiver can literally have any kind of problem imaginable from those with competitors to the underlying business, governmental agency and legal issues, miscellaneous lawsuits, tenant issues, pollution, equipment failures, and on and on.