Court-appointed receivers are powerful and independent judicially-appointed managers. The receiver completely displaces the defendants or entity being placed into receivership. The receiver makes large and small decisions, controls every aspect the business, organizes creditors, and collects from debtors of the entity. The purpose of receivership is to preserve the assets of the entity. A receivership proceeding does not necessarily involve an insolvent debtor. A receiver may be appointed to regain title to property that has been fraudulently purchased, or to preserve the funds in a bank account that might be in danger of being improperly emptied. Where there is an insolvent debtor the receiver completely takes over the property and the debtor loses all control. Commercial real estate loan agreements and business loans from banking institutions typically contain provisions requiring the appointment of a receiver in cases of default. Receiverships generally involve state courts and state law, but can be in the federal courts.
Attorneys at Maguire & Schneider advise clients regarding receivership issues, and we also act as legal counsel to court-appointed receivers. Our attorneys have experience as receivers at both the federal and state level. Our experience is enhanced through our knowledge of securities and banking matters and through our representation of several large banking institutions.