Can A Receiver Be Appointed To Collect Accounts Receivable?

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QUESTION: Can a receiver be appointed at the request of a secured creditor holding a lien on accounts receivable for the limited purpose of collecting the receivables?

ANSWER: C.C.P. §564(b)(9) may support an action for specific performance of the provisions of loan documents, by way of a receivership. In addition, a receiver may be appointed to enforce a judgment (C.C.P. §564(b)(3)) and to collect a debt. (C.C.P. §568). However, many judges will not appoint receivers for these purposes, because of the cost of a receivership, without other specific showings, such as there is no other available remedy or the assets are being converted, transferred out of state, or secreted. In other words, “know your judge”.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ervin Cohen & Jessup LLP | Attorney Advertising

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