Posted in: Corporate Receiverships, Court Appointed Receiver, Criminal Receiverships, Health and Safety Receiverships, Post-Judgment Receiverships, Rents and Profits Receiverships, Trust and Estates Receiverships

What is a Court Appointed Receiver?

When people hear the term receiver they may think of NFL Hall of Famer Jerry Rice, but a Court-Appointed Receiver is a whole other ball game.

The use of Court-Appointed Receivers began in the Old English Chancery Courts and were often used to take control of an estate that did not have an heir. For example, in the 1500s when a King died without a son or heir to take over the kingdom, what happened to his knights, his treasury, his staff, the castle, etc? In these situations the Chancery Court would appoint an educated, qualified, and responsible person, known as a receiver, to take control of and run the castle until a successor for the king was found.

The use of Court-Appointed Receivers continued into America and receivers are called upon today when something is out of control. Therefore, receivership can arise in a variety of ways—ranging from abating the issues presented by a nuisance property in a residential neighborhood to winding down Bernie Madoff’s Ponzi schemes.

In summary, whenever something is out of control a Receiver is appointed by the Court to take control of it and bring it to order. The Receiver is a neutral agent of the Court that must act in the best interest of all parties to achieve a just result. The Receiver has extremely broad powers, which include being able to sell and even demolish property. However, the Receiver must use these broad powers to act in the best interest of all parties, or face being removed from the court. Furthermore, the Receiver must promptly report his or her actions to the Court and all parties to ensure he or she is acting in the best interest of all parties. Once the receiver brings the situation back to a state of normalcy, he or she seeks discharge from the Court.

Bay Area Receivership Group handles a few specific types of receiverships, which are explained below:

[WPSM_AC id=19]

As the California Supreme Court recognized in 2008 a health and safety receiver is empowered to sell and even demolish properties under their control. The California Supreme Court giving a receiver the power to demolish a property is an example of a court sitting in equity giving a receiver broad power to advance the requirements of justice. Health and safety receiverships are used throughout the state and they are an effective way for Cities and Counties to abate nuisance properties. It is also worth noting that Cities and Counties are entitled to recover their attorney’s fees and enforcement costs.