CHAPTER 9.06. Receiver

• Jurisdiction: United States

9.06. Receiver

A lender may apply to the Court of Chancery for the appointment of a temporary receiver pendent lite to preserve the property involved in litigation over its loan.⁴⁸ Although not necessary, Delaware mortgages often contain language providing for the appointment of a receiver in the event of default. The court will consider such receiver provisions in the mortgage when determining whether to appoint a receiv-er.⁴⁹ No case law in Delaware suggests that the lender is entitled to the appointment of a receiver as a matter of right.⁵⁰ Accordingly, the Court of Chancery will use its equitable powers and weigh the merits of each case.

The lender must make an application for the appointment of a receiver in a verified complaint it files with the court.⁵¹ The court may require the defendant to show cause why the receiver should not be appointed.⁵² After the hearing, and based on the facts of the case, the court...