There may come a time in your life when having a court receiver appointed to you may be needed. But how will you know when the time is right? And what are the benefits to it? Below is a quick description of what a court appointed receiver does, and how they may benefit you. Hopefully this will help you clear things up for you, so that if the situation arises in your future, you will know what to do.
What Is A Court Appointed Receiver?
When money or property is subject to litigation, sometimes a court will appoint a receiver to manage, take custody and preserve it so that the property/money remains intact until it can be acted upon. A receiver ensures that nothing happens to the money or property while a decision is being made on it, so that neither party has control of it. While this action is rarely used in courts, if it is demonstrated that a receiver is necessary, then a court will appoint one. So why might one ask for the court to do this?
Settlement Trigger
Sometimes the simple act of asking the court to appoint a receiver can trigger a settlement in your case. Why might this happen? For starters, asking for a receiver signals to the other side that you mean business. They may start taking you more seriously, and will ask for a settlement to clear things up more quickly.
Second, many business/property owners do not like to lose control of their assets. By asking the court to remove their property from their control, this can make the other party more likely to want to negotiate a settlement.
Third, with the use of a court receiver comes more legal fees. While money is not the sole factor in a lot of legal suits, sometimes the fear of spending more money on something can make one party want to settle.
Good Mediation Position
A receiver appointed to your case comes in as a neutral third party. This puts them in an ideal position to help mediate the suit. By not answering to either of the clients - the receiver answers only to the judge - they can help to foster a solution that will work for both parties.
So often in cases the two parties involved become so entrenched in their positions that finding common ground becomes almost impossible. Without a third party coming in to handle the situation, the two parties are likely to not get anywhere, and simply waste time arguing. Companies like Fed Receiver - a California based receiver firm - specialize in not only managing assets, but in mediation. If you have been stuck in the middle of a suit for a long time, and you don’t think either side is going to budge, perhaps it is time to bring in a fresh pair of eyes.
New Approach To Management
When a receiver is asked to take control of an asset, often they will be tasked with forming an analysis of the current management. They will try to determine what is working, and what is not. From there they can install in management, bringing along a fresh perspective as to how things can be run more efficiently.
In some cases, a receivership can lead to a more profitable company, happier employees, and a better brand image. While the previous management may have had their hearts in the right place, sometimes you can be too close to a situation to see it clearly and make the changes that are necessary for success. A receiver has no connections to the business, and can therefore make decisions that others cannot.
Know The Benefits
Before you can decide if you need a receiver, you need to know the benefits. Besides the ones mentioned above, a receiver can do things like ensure your property is kept safe, improve its value, and keep it insured throughout the process. If you think having a court appoint a receiver to your case will be beneficial to you, we highly suggest you look into it and talk to your lawyers. Going to court is stressful enough without having to worry about the integrity of your property.
