Unique Receivership Projects: How the Receivership Remedy Addressed a California Church Dispute

shutterstock_307415057The receivership remedy can be used for more than just resolving property disputes between two parties. 

Rather, it can be applied to any legal dispute when two parties are at odds over the control, use, or ownership of any asset.

Griswold Law was recently appointed over a unique project: taking financial control of a church in order to monitor financial operations and prohibit mismanagement of funds. 

Why Would a Church Need a Court-Appointed Receiver?

Griswold Law was appointed by the court after the church was accused of misappropriating funds. 

Receivers are typically appointed to take control of real estate assets or distressed business operations. However, experienced receivers are often required to step into unique situations. 

Church budgets are complicated, and congregations and denominations have different approaches to handling them. The pastoral staff, a treasurer, an elder board, or a committee of congregation members may oversee budgets. 

Churches and their entity boards owe duties to their congregants, just like standard corporate businesses owe duties to shareholders and customers. In light of an unresolvable conflict regarding these duties, Griswold Law assumed supervisory control over the financial operations of an active church.

Considerations for a Receivership over a Church

With a religious organization, there are many special considerations at play. 

Each new receivership assignment requires the receiver and his or her team to familiarize themselves with the asset it is overseeing. When it’s a new industry, it’s important to learn about and respect the specific rules and regulations of that industry.

A church enjoys many freedom of religion protections that are well established in our country. Therefore, a court-ordered receivership has the potential for conflict if the court, the receiver, and the parties are not all on the same page.

At a foundational level, it is imperative that all of the parties understand the distinctions between business and financial control as opposed to control over religious expression. Even when a church is under the supervision of a court-appointed receiver, the church still has its freedom of religious expression fully intact. The receiver only controls business and financial operations. 

Griswold Law Manages Complex and Unique Scenarios via the Receivership Remedy

The receivership remedy remains a valuable tool to ensure the proper financial management of businesses, organizations, family assets, and even churches. 

This kind of oversight allows for a receiver to root out any bad actors that have been mismanaging funds on behalf of others–whether it’s church board members on behalf of the congregation or business owners on behalf of their investors. 

Richardson “Red” Griswold has been appointed to numerous complex cases throughout California. To find out more about Griswold Law’s services, schedule a free consultation today


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