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Do I need to worry about receivership in business litigation?

On Behalf of | Sep 26, 2022 | Business And Commercial Law |

If this is the first time you have heard the term “receiver,” you must be doing something right with your business. A receiver is a person appointed by a judge to take over your Tampa, Florida, business. Of course, this means something has gone very, very wrong.


Receivership is considered a provisional remedy in business and commercial litigation. The receiver is a neutral third-party or company that is appointed by a judge through an Order Appointing Receiver. When that person or entity takes possession of the business and the business’s assets, the process is known as receivership.

An extension of the court

Receivership can occur in both state and federal litigation because the process is seen as an extension of the court. As the California Court of Appeals explained, a receiver is a temporary, ministerial officer of the court. They represent the court that appointed them, and his actions are at the behest of the appointing court.

When is a receiver used?

Receivers are only used when there is a concern that the business owner may do something nefarious to the business, not running the business property or is doing some other act that could interfere with the outcome of the trial, the damage calculations or some other reason. The receiver is appointed to preserve and maintain the business and business property. However, if you are in active litigation with the federal government (DOJ, SEC, HUD, etc.), they often ask for a receivership appointment.

What are the receiver’s duties?

Each receiver’s duties are outlined by their appointing order. It will expressly outline their duties, responsibilities and the assets and entities they are charged to protect. Regardless of their outlined duties, they have a neutral fiduciary duty to take control, preserve and maintain those assets until the litigation concludes. However, they may be empowered to sell those assets and entities, and then hold the proceeds for the court.


For a Tampa, Florida, business, you can tell that a receivership is not something you want to happen. This is why, if you face business or commercial litigation, especially with the federal government, you need an attorney immediately. Quite literally, your business is at stake.