The "Devil's Dictionary" is a quick-reference guide for commercial lenders and other restructuring professionals. In this series, we highlight many of the buzz words found in the Dictionary and used in today's bankruptcy arena.
RECEIVER: A supposedly disinterested person appointed by a state or federal non-bankruptcy court to administer a borrower’s property. Although the Code prohibits the appointment of a receiver in a bankruptcy case, Section 543 permits the court to allow a receiver appointed prepetition to remain in place during the bankruptcy case if the court finds that the interests of creditors are better served by permitting the receiver to remain in place. Because creditors have been increasingly successful in keeping receivers in place postpetition, creditors and debtors now frequently engage in a race to two courthouses—the creditor racing to a non-bankruptcy court to seek appointment of the receiver—and the debtor racing to bankruptcy court to obtain the benefits of the automatic stay before a receiver can be appointed.
Bankruptcy Code §§ 105(b), 543. See also Custodian.
The "Devil's Dictionary" is an excellent reference tool that reflects the collective wisdom of its four authors, Brett Anders, Jim Bird, David Ferguson, Dan Flanigan, and digital editor, Christopher Ward, who have a combined total of more than 130 years working in the forefront of real estate and other commercial finance, loan enforcement, financial restructuring and bankruptcy law.
