When business owners hear the word receiver (or receivership), they think of bankruptcy. However, what many business owners learn all too late during Chicago, Illinois, business litigation is that many lawsuits can include a motion for receivership.
What is it?
Essentially, a receivership is the process where your business (either a part of it or the entire entity), a business asset or all the business assets are taken from your care and control and placed under the care and control of an independent third party. This third party works for the court, but they would then control those assets or your entire business during the trial, even before the case is decided.
The powers of the receiver
As an extension of the court, the receiver is empowered by the court, and their powers are outlined in the court order that appointed them. However, generally speaking, they are empowered to care for the assets that they legally take title to, which can include disposing of them, holding them or even running your Chicago, Illinois, business.
Generally, receivers are appointed when the judge is convinced that there will be some waste of an asset or your business. In other words, the court is convinced that you will misuse the business and/or its assets in some way to the detriment of the other party and the business and/or its assets are part of the Chicago, Illinois, court proceeding.
Should I always worry about it?
Not all Chicago, Illinois, business litigations involves the threat of receivership, but most do. And, if one of the parties to the litigation is the federal government, they will ask for receivership. This is why you should collaborate with your attorney to avoid business litigation wherever possible.