California – How and When to Use Court Appointed Receiver Specialists

Receivers are appointed in both state and federal court in connection with underlying litigation. The appointment of receiver is not a cause of action; rather, it is an ancillary remedy. A receiver may be appointed in California pursuant to the California Rules of Court, §564. Courts view a receivership action as a drastic remedy. Alternative solutions should be considered prior to immediately seeking the appointment of receiver. Depending on the nature of the dispute, it may be appropriate to seek the appointment of receiver on an ex parte basis. Often, courts will require such relief on a noticed motion basis.

 

The most common type of receivership is a “real estate” or “rent issues & profits” receiver. Such appointments are sought in connection with a default by a borrower in an action filed by a secured lender related to the foreclosure of real property. A lawsuit must commence related to specific performance of an assignment of rents as part of either a judicial or non-judicial foreclosure action. The court has the power to appoint a receiver on its own motion without any request from a party in the litigation.

 

The receiver is, by definition, a neutral agent and/or arm of the court and he/she is typically vested with the power to take possession of assets of the estate that are the subject of the underlying litigation. Assets are held for the benefit of the court and not for either the plaintiff or defendant. Receivership appointment is a powerful tool that is available to parties that seek to preserve and maintain disputed assets.

 

The Los Angeles court receivers at FedReceiver have years of experience yielding substantial, positive results for our clients. Please visit our website to learn more about our services or to schedule a consultation.