A receiver is an individual/entity which generally takes charge of property, keeps it in its custody for a set period of time, and manages it on set terms and conditions. In application, it is often reserved for situations in which there is an emergency or imminent threat of loss. For example, if a bank has a promissory note and deed of trust on property, and it appears there is a threat of the bank losing its collateral/mortgage interests, a receivership may be appropriate.
Missouri Supreme Court Rule 68.02 deals with the appointment of receivers:
Whenever in a pending legal or equitable proceeding it appears to the court that a receiver is necessary to keep, preserve and protect any business, business interest or property, including money or other thing deposited in court or the subject of a tender, the court, or any judge thereof in vacation, may appoint a receiver whose duty it shall be to keep, preserve and protect, to the extent and in the manner that the court may direct, that which the receiver is ordered to take into the receiver’s charge.
Missouri courts have further stated that in order to have a receiver appointed over property, funds or assets, the petitioner must show that he/she has a clear right or apparent right or title in or to the property, or that the property constitutes a special fund in which there is a right to resort for satisfaction of a claim. The property needs to be directly involved. Additionally, when there is no good cause to believe that benefit would result from the appointment of a receiver, a the court should decline to make such an appointment. Sangamon Assocs., Ltd. v. Carpenter 1985 Family P’ship, 165 S.W.3d 141, 146 (Mo. 2005). A receiver should be appointed only when the court is satisfied that the appointment will promote the interests of one or both parties, that it will prevent manifest wrong, and that the injury resulting will not be greater than the injury sought to be averted. Id. Provided that the foregoing requirements are met, the power to act rests largely within the discretion of the court.
Because of the great responsibility often entrusted to a receiver, Rule 68.02(b) requires that a sufficient bond be posted to protect the parties.
Contact us with questions.