10.8 Other Considerations in the Appointment of a Receiver

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

10.8 OTHER CONSIDERATIONS IN THE APPOINTMENT OF A RECEIVER

10.801 Who May Be a Receiver?

A. Neutrality. The Circuit Court of Richmond, in Gammon v. First Dominion Development Corp., ¹⁴⁰ held that the court-appointed receiver cannot be the attorney for one of the parties to the proceeding. The court added that the "general rule is that such a receiver ought to be a person who is without interest in the cause and who stands indifferent between parties." ¹⁴¹

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B. Wishes of Parties. Nonetheless, it appears that courts are given discretion in appointing a receiver and may give the parties an opportunity to mutually agree on a receiver. If the parties fail to do so, the court will appoint one of its own choosing. ¹⁴²

10.802 The Receiver's Bond.

A. Requirement. A receiver is required to give a bond and security "for the faithful discharge of his duties." ¹⁴³ section 13.1-748 of the Virginia Code merely states that the court "may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs." ¹⁴⁴

B. Amount. Although a receiver must post a bond, no case has explained how the court calculates the amount of the receiver's bond. For example, the circuit court in Stickley v. Stickley ¹⁴⁵ ordered that the receiver post a $1,250,000 bond, but did not indicate the basis for the amount. Therefore, the determination of the bond amount is calculated on a case-by-case basis depending on the circumstances of the case. The amount might be set, for example, based upon the maximum amount of money expected to be under the control of the receiver on any given date.

10.803 Compensation of the Receiver. The court is allowed to compensate the receiver for services. ¹⁴⁶ section 8.01-589 of the Virginia Code provides that general receivers are to be compensated in such amount as the court deems reasonable, but not exceeding (i) ten dollars at the receipt of the receivership order, (ii) ten dollars when all funds held for a beneficiary...