10.5 Considerations of the Court in Appointing a Receiver

• Library: Enforcement of Liens and Judgments in Virginia (Virginia CLE) (2019 Ed.)

10.5 CONSIDERATIONS OF THE COURT IN APPOINTING A RECEIVER

10.501 Discretionary Standard. Neither the Virginia Corporation Code nor title 8.01 of the Virginia Code specifies the grounds upon which the court will appoint a receiver pendente lite or permanent receiver. As a result (and by default), the court is given great discretion in determining whether or not to appoint a receiver. ⁸⁶

10.502 Considerations. Three general rules have been identified to guide the court's decision to appoint a receiver:

	1.	The court's discretion is exercised consistently with the particular facts of the case;
2.	The court exercises great caution in appointing a receiver; and
3.	A receiver will not be appointed if another adequate remedy exists. 87

10.503 Presumption Against the Appointment of a Receiver. In Virginia, the appointment of a receiver will not be "rubber-stamped" by the court and should only be exercised with caution. ⁸⁸ "Appointment of a receiver is an

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extraordinary remedy that the Court is not generally empowered to fashion absent a showing of insolvency, fraud, waste, or improper conduct." ⁸⁹

10.504 Showing Required. The rule that courts are reluctant to appoint receivers merely because a corporation is unwilling or unable to conduct its own business...