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Texas receivership law

On Behalf of | Dec 2, 2022 | Business Law, Business Litigation

In our state, we hold property and business rights sacrosanct. Personal freedom is our mantra. However, it may surprise some that these ideals may not be present during business litigation. Specifically, in a motion for Dallas, Texas, receivership.

Receivership?

Receivership is a process that can happen in both state and federal court where the judge appoints a receiver. That receiver is then empowered by that judge to take legal title of your entire business, its assets or some amount of your assets. This can be done during the case and after a case (during appeal).

Not a standalone action

A motion for receivership is not the basis of an action, and you will not receive notice of receivership litigation. Instead, it is a motion that is filed with the court asking that a receiver be appointed, or where the judge unilaterally believes a receivership is appropriate. This is important because it is a separate issue that is litigated in addition to the underlying facts of the case.

Texas receivership law

In our state, Texas Civil Practice and Remedies Code, Chapter 64 controls receivership. Receivers can be appointed where a fraudulent purchase is alleged, a party is creditor or any business asset is at issue (even if just to fund a claim) and where there is a dispute between business owners or partners. Mortgagees, business insolvency issues and any other cases where the judge feels a receivership is appropriate could justify a receivership motion and appointment.

For Dallas, Texas, business owners, the key here is that every threat of business litigation should be taken seriously. Even frivolous cases or cases that you think have no merit could involve a receivership motion at some point, which could cost you your business, even if only temporarily.

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