Normally, a Receiver situation arises in cases involving a business problem or lawsuit, bankruptcy or foreclosure. In certain instances, a Receiver is requested to be appointed in cases involving a divorce, estate, guardianship or trustee situations, including but not limited to cases for the benefit of minor children.
With cases involving a nervous creditor, or in a case in connection with a lawsuit, a Plaintiff’s attorney may request the judge to appoint a Receiver to manage or protect the condition or value of the assets. The Receiver oversees and takes care of the ‘assets’, under the supervision and direction of the Court.
Ultimately, the Receiver works under the direct orders and supervision of the Court. The Court orders are specific as to the duties and responsibilities of each Receiver assignment. The Receiver works independently of all other parties, reporting only to the appointing Judge.
Ideally, a Receiver would work to protect or even improve or increase the value and condition of the property assets. However, many times these assignments offer limited resources, liquidity or cash flow. In those situations, the Receiver works within the limits of available funds and resources to protect and maintain the property assets until the property is sold, or the court directs and settles the disposition of the assets.
Black’s Law Dictionary defines
“Receiver: An indifferent person between the parties to a cause, appointed by the court to receive and preserve the property or fund in litigation, and receive its rents, issues, and profits, and apply or dispose of them at the discretion of the court when it does not seem reasonable that either party should hold them. Or, where a party is incompetent to do so, as in the case of an infant. The remedy of the appointment of a receiver is one of the very oldest in the court of chancery (equity), and is founded on the inadequacy of another remedy to be obtained in the ordinary court of jurisdiction (law).”
Webster’s NewWorld Dictionary defines
“Receiver (Ri ce ver) n. ) Law one appointed by a court to administer or hold in trust property in bankruptcy or in a lawsuit”
“Receivership (Re.cei.ver.ship) n. Law 2. the state of being administered or held by a receiver”
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