A Court-Appointed Riverside Partnership Dispute Receiver Is Here to Help

Partnership or LLC receivership appointments in California arise under California Code of Civil Procedure section 564. When a Riverside Partnership Dispute Receiver is appointed as an equity receiver—taking possession of 100% of the entity—the receiver effectively steps into the shoes of the manager and makes all operational, managerial, and financial decisions pursuant to court order.

Although the order appointing the receiver specifies the scope of authority, the receiver typically works to preserve the status quo between the disputing parties while litigation is ongoing. As a neutral agent of the court, the receiver acts for the benefit of all interested parties, including creditors. All assets are held by the court through the receiver, not by the partners or members involved in the dispute.

California Code of Civil Procedure section 564(b) outlines the statutory circumstances in which a court may appoint a receiver:

(b) A receiver may be appointed by the court in which an action or proceeding is pending, or by a judge of that court, in the following circumstances:

(1)When a seller seeks to void a fraudulent property purchase, when a creditor seeks to subject assets to a claim, or in actions involving partners or co-owners of property or funds—particularly when those assets are at risk of being removed, concealed, or materially damaged.

(2) In foreclosure actions where the collateral property is in danger of loss or damage, where loan obligations have not been performed, or where the property is insufficient to satisfy the debt.

(3) Following a judgment, to help implement and enforce that judgment.

(4) After judgment, to preserve or dispose of property during appeals, under the Enforcement of Judgments Law, or during foreclosure redemption periods—including managing and distributing rents as directed by the court.

(5) When a corporation has dissolved, consistent with Section 565.

(6) When a corporation is insolvent, nearing insolvency, or when its corporate rights have been forfeited.

(7) In unlawful detainer actions.

(8) When requested by the Public Utilities Commission under Public Utilities Code 1825 or 1826.

(9) In any situation where appointment of a receiver is necessary to protect property or party rights.

(10) At the request of the Office of Statewide Health Planning and Development, or the Attorney General, pursuant to Section 129173 of the Health and Safety Code.

(11) In actions seeking specific performance of an assignment of rents under a deed of trust, mortgage, or related document, including continued appointment after judgment to protect or operate encumbered property, or to collect rents during ongoing nonjudicial foreclosure activity.

(12) In a case brought by an assignee under an assignment of leases, rents, issues, or profits pursuant to subdivision (g) of Section 2938 of the Civil Code.

In partnership disputes, courts most frequently rely on subdivisions (b)(1)—relating to disputes between co-owners—and (b)(9)—where protection of property or rights necessitates receivership.