Receivership
Court-appointed receivership representation
When assets need to be preserved during litigation or financial distress, courts appoint a receiver. Max Tarbox serves both as a receiver and as counsel for parties in receivership.
Overview
What is receivership?
A receivership is a court-supervised process in which a neutral third party — the receiver — is appointed to take control of property or a business. Receivers preserve assets, operate businesses, sell property, and distribute proceeds under direct court oversight. Because the receiver answers to the court rather than to any party, receivership is one of the most powerful tools available when there is a real risk that assets will be lost, dissipated, or mismanaged before a dispute can be resolved.
In Texas, receivers can be appointed under both state statutes and a court's general equitable powers. The scope of authority is defined by the appointment order, which can be as narrow as collecting rents on a single property or as broad as taking over an entire operating business — including its bank accounts, contracts, payroll, and ongoing litigation.
01
Asset Protection
Preserves value while disputes are decided.
02
Court Supervision
Receiver reports directly to the appointing court.
03
Neutral Authority
Independent of all parties to the case.
Common Triggers
When are receivers appointed?
Texas courts appoint receivers when there is no other adequate remedy and assets are at risk. The most common scenarios fall into a handful of recurring fact patterns:
01
Partner & shareholder disputes
Deadlock, freeze-outs, or alleged self-dealing inside closely-held businesses.
02
Lender enforcement
Default on commercial real estate or operating loans where the lender needs immediate control.
03
Fraud or mismanagement
Allegations of waste, embezzlement, or destruction of business records.
04
Divorce with business assets
Complex marital estates that include operating businesses, real estate, or partnerships.
05
Pre-bankruptcy stabilization
Holding the line on a struggling business while a Chapter 11 plan is prepared.
06
Judgment enforcement
Turnover receivers used to collect on Texas judgments under Civil Practice & Remedies Code §31.002.
Whatever the trigger, the court's central question is the same: would appointing a neutral receiver protect the property better than any available alternative? Where the answer is yes, the appointment can happen quickly — sometimes the same day a motion is heard.
Side-by-Side
Receivership vs. bankruptcy vs. ABC
Receivership is one of three primary tools for managing a distressed business or asset. Choosing the right path depends on speed, cost, level of court oversight, and what outcome the parties want.
Comparison Chart
Receivership vs. Bankruptcy vs. ABC
| Feature | Our FocusReceivership | Bankruptcy | Assignment for Benefit of Creditors |
|---|---|---|---|
| Forum | State court | Federal court | Out of court |
| Who controls assets | Receiver | Debtor in possession or trustee | Assignee |
| Automatic stay | Court-ordered injunction | Yes — federal §362 stay | No statutory stay |
| Speed to start | Days | Weeks | Days |
| Typical duration | Months to years | Months to years | Weeks to months |
| Cost | Moderate | Higher | Lower |
| Public record | Yes | Yes | Limited |
| Best for | Asset preservation in dispute | Debt restructuring or discharge | Orderly liquidation |
In practice, these tools are not always mutually exclusive — receivership can precede a bankruptcy filing, or a receiver may be replaced by a Chapter 11 trustee if reorganization becomes the better path.
Court-Officer Experience
Trusted by Texas courts to take control when assets are at risk.
Two decades inside Texas insolvency, complex receiverships, and contested business disputes — operating directly under court supervision.
How It Works
The receivership process — from motion to discharge
Every receivership is shaped by the appointment order, but most cases move through the same six core stages. Here is what to expect from filing the motion through final discharge of the receiver.
- Step 01
Motion & emergency hearing
A party files a verified motion or application showing assets at risk and the absence of an adequate alternative remedy. Courts can hear emergency requests within days — sometimes the same day — particularly when there is evidence of imminent dissipation or fraud.
- Step 02
Appointment order & bond
If the court grants the motion, it issues an appointment order defining the receiver's powers, the scope of estate property, reporting obligations, and any required bond. The order often includes an injunction barring interference with estate property.
- Step 03
Take possession & stabilize
The receiver takes physical and legal control of estate assets — securing premises, opening estate bank accounts, notifying counterparties, retaining counsel and professionals, and stopping the bleeding (payroll, insurance lapses, abandoned properties, runaway expenses).
- Step 04
Investigate, operate & report
The receiver investigates books, contracts, transfers, and claims; continues operating the business if so authorized; and files periodic reports and accountings with the court. Interested parties receive notice and an opportunity to be heard on material decisions.
- Step 05
Sell assets or implement plan
With court approval, the receiver markets and sells real estate, equipment, or business interests — or implements a court-approved restructuring plan. Sales typically occur free and clear of liens, with liens attaching to proceeds and resolved through a separate distribution process.
- Step 06
Final accounting & discharge
The receiver files a final report and accounting, distributes remaining funds per the court's instructions, and applies for discharge. Once approved, the appointment order is dissolved, the bond is released, and the receiver's authority over the estate ends.
Timelines vary widely by case complexity. Simple turnover receiverships can complete in weeks; operating receiverships over contested businesses often span a year or more.
Receivership FAQ
Frequently asked questions about receivership
Straight answers to the questions clients most often ask about Texas receivership proceedings — from how a receiver is selected to how the case ultimately ends.