7.4 Receivership Certificates.

• Jurisdiction: Arizona

Under the common law, a court-appointed receiver has the power to obligate the assets under its jurisdiction to repay court-approved borrowing. Following this precedent, it seems clear that upon a court order, a receiver, as an officer of the court, can borrow money and enter into formal obligations to repay the same. Wood v. Guar. Trust & Safe Deposit Co., 128 U.S. 416, 9 S. Ct. 131 (1888). When this occurs, the formal obligations take the form of receiver’s certificates. Int’l Trust Co. v. Decker Bros., 152 F. 78 (Alaska 9th Cir. 1907). The obligations are, in a limited sense, the obligations of the court, and the court clearly has the power to authorize issuance of the receiver’s certificates. Atlantic Trust Co. v. Chapman, 208 U.S. 360, 28 S. Ct. 406, 52 L. Ed. 528 (1908).

Receiver’s certificates enable the receiver to secure a loan to the receivership with the assets in the receiver’s possession. Generally, the goal of a court in authorizing the receiver to borrow money is to enable the receiver to keep the property from deteriorating or to keep the business operating as a going concern...