receivership

/ri see"veuhr ship'/, n. Law.

1. the condition of being in the hands of a receiver.

2. the position or function of being a receiver in charge of administering the property of others.

[1475-85; RECEIVER + -SHIP]

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In law, state of being in the hands of a receiver, a person appointed by the court to administer, conserve, rehabilitate, or liquidate the assets of an insolvent corporation for the protection or relief of creditors.

It is a legal solution to a financial difficulty; it does not necessarily entail the termination of the corporate charter. See also bankruptcy, insolvency.

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▪ law

      in law, the judicial appointment of a person, a receiver, to collect and conserve certain assets and to make distributions in accordance with judicial authorization. A receivership is properly an intermediate or incidental step toward some other principal objective and not generally the object of litigation. The principal objective may be the preservation of the assets pending a decision as to who should receive the property, or it may be the liquidation of the assets and the distribution of the proceeds to the parties entitled to them.

      A receivership may be general in character in that it comprises all the assets of the individual, partnership, or corporation, or it may be special, involving only the property subject to litigation.

      The powers of the receiver—syndic and Administrator in France and Germany, respectively—in dealing with the assets are based on statutory provisions or judicial decrees. As a practical matter the extent of the receiver's powers often is determined by the nature of the assets. For example, if the asset is unimproved real estate, the receiver's powers may involve simply the payment of taxes. If the asset is an apartment building, the receiver's powers could include management, collecting rents, and signing leases.

      If the court feels that, in the best interest of the parties involved, the assets should be liquidated, the court will authorize the receiver to sell the assets at a judicial sale, which is conducted in the form of an auction.

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