The legal circumstances surrounding divorce are rarely straightforward. When it comes time to divide assets between a divorcing couple, things get even more complicated. Emotions run high, and arguments are common. Even when a judge determines the next course of action, people don’t always want to cooperate.
Family Code section 290 states that when necessary, a divorce judgment “may be enforced by the court by...the appointment of a receiver.” That means that there are times that a court-appointed receiver will enforce the next course of action.
What Is the Role of a Divorce Court-Appointed Receiver?
When one party in a divorce chooses not to comply with court orders, a court-appointed receiver is a neutral party who is chosen by the judge to take care of asset management. Think of it this way: the receiver is the person who ensures that the court proceedings are actually enforced and not just listed on a filed document.
This appointee does not represent either party in the divorce; instead, they represent the court and are legally capable of making decisions that attain the court’s goals of asset division.
Often called a “receivership remedy,” this arrangement provides the court with the power they need to address long-standing non-compliance from divorcing parties.
Some of the scenarios that could lead to the court appointing a receiver include:
- When the assets to be split include a co-owned and co-operated family business
- When there is a family-owned business, but only one spouse is involved in its operations
- When one party is unwilling to pay spousal or child support, even though it is owed
- When it is clear that one spouse is hiding cash or assets from the court
- When significant refinancing needs to occur during the divorce
The role of the receiver is to take over the decision-making related to a property or major asset and then fulfill the wishes of the court with regards to that asset.
A Receivership in Action
Recently, receiver Richardson “Red” Griswold from Griswold Law was appointed to ensure the court’s will was enforced in a high-stakes divorce judgment. The court had determined that the former husband needed to provide an equalizing payment to his former wife by selling farmland. He owed her more than $2.5 million.
When Griswold was appointed, he was authorized to hire a specialized farm land broker. Griswold was authorized to act as the seller in the transaction. After obtaining final court approval of the sale and its terms, Griswold will close the sale and transfer the funds to the ex-wife as ordered by the court.
This is a great example of an appropriate use of the receivership remedy in a divorce action under difficult circumstances.
Who Can Request a Court-Appointed Receiver in a Divorce Case?
Receiverships aren’t necessary for most divorces. They are usually initiated by one party or the court upon repeated non-compliance by another party.
Do You Need More Information About a Court-Appointed Receivership?
We would be happy to help!
Please contact us so that we can answer all of your questions and help you determine how a court-appointed receiver might assist in resolving your divorce matter.
Watch our video below to learn how Griswold Law was able to remedy a divorce judgement through receivership.