Receivership FAQ
What Is A Receiver?
A Receiver is a neutral third-party professional appointed by the Court in Minnesota to perform certain tasks as directed by the Court. Receivers can be “general” or “limited.” Most typically Receivers in Minnesota are appointed in a limited capacity. Many Receivers are lawyers, some can be accountants and some may be property managers. Receivers can take on many tasks. In more complex matters the Receiver is almost always a lawyer, and that lawyer may be empowered to hire other professionals like an accountant or a realtor to assist them in performing their duties.
What Kinds Of Things Does A Receiver Do?
Receivers can be put in place to perform any number of tasks. Examples may include: running a business that is going through litigation or where its operations have been stalled because of deadlock between its owners; selling a home or other assets during a contested divorce matter; locating and securing assets of a person or business during some form of litigation and liquidating those assets, protecting and safeguarding assets in a divorce, civil, real estate or business lawsuit, or taking actions to protect a creditor or lienholder, which could be another business, a vendor, or a former spouse (who might be owed support or spousal maintenance).
Who Is In Charge Of The Receiver?
The Court Order appointing the Receiver controls and directs the power of the Receiver and the Receiver is always subject to control of the judge or court appointing the Receiver. At times, the Receiver or a party in the case may ask the judge to clarify the role of the Receiver or make a decision on a particular issue. Receivers can seek instructions from the judge who appointed them if the order was unclear, or an unforeseen circumstance arose.
When Would I Need To Use A Receiver?
The most common situations in which Receivers are needed is in contested divorce or real estate matters. For example, two parties in a case don’t agree on things related to selling real estate, yet both must sign the real estate listing agreement and sale documents. Sometimes this happens when one party to the lawsuit is being difficult, sometimes when both are difficult. Receivers can also be appointed if there is a mental health or physical health problem that challenges the operations of a business. A judge can appoint a Receiver in these situations to be the person to make those decisions to avoid delay, protect assets or their value, and avoid additional litigation and costs. In many cases, using a Receiver to handle these situations is far less expensive that the cost of litigation.
How Do I Know What The Receiver Is Doing?
Receivers are required by law to perform certain tasks.They are also required to report to the court and parties on the status of their work as long as they are appointed, and their records and actions are subject to discovery and to court control. Receiver powers can also be limited to require court orders before performing certain tasks which will also allow the parties to be aware of what the Receiver is doing and argue a position to the court.
Are There Other Alternatives To A Receiver?
Yes. In some case types the court can appoint a neutral third party to perform tasks without that third party being appointed as a Receiver. This is most common in probate and estate files where a neutral personal representative, neutral special administrator, or neutral trustee may be appointed by the court to handle matters related to an estate or trust. The court also has the power to appoint an auditor to review work of a past personal representative or an heir and report to the court. Following an audit report indicating an irregularity (like embezzlement by a prior fiduciary), the court may change the appointment from auditor to a neutral personal representative.
In family court, judges can also appoint a Consensual Special Magistrate. This involves a process in which the neutral decides issues after the parties have presented their positions similar to a trial but in a less formal and typically less expensive way.
Special Masters may also be appointed in family and civil cases to handle particular issues related to parenting time, discovery or other issues that may arise in a contested case.
At JMW, we have experience in serving as Receiver, Personal Representative, Auditor, Trustee, Special Administrator, Special Master and Consensual Special Magistrate. If one of these tools may be helpful for your case, please contact our office at 952-314-4189 for a consult. You may also contact us using this email form.