Opinion ID: 2630997
Heading Depth: 3
Heading Rank: 1

Heading: The Powers of the Presiding Courts

Text: It is well-established that [t]he ultimate purpose of a receivership is to enable the court to accomplish, so far as practicable, complete justice between the parties before it[,] which includes the preservation and proper disposition of the subject of litigation. This goal includes the providing of full protection to the parties' rights to the property until a final disposition of the issues[,] and it is essentially a question of whether the appointment of a receiver would serve a useful purpose. Thus, a receivership seeks to prevent injury to the thing in controversy and to preserve it, pendente lite or after judgment, for the security of all parties in interest, to be finally disposed of as the court may direct and to ensure that the rights of parties are more secure. 65 Am.Jur.2d Receivers § 6 at 657 (footnotes omitted). The United States Court of Appeals for the Ninth Circuit [hereinafter, the Ninth Circuit] has enunciated two basic principles in dealing with receiverships. The first principle is that the court  here, the circuit court  has broad powers and wide discretion to determine the appropriate relief in an equity receivership. Sec. & Exch. Comm'n v. Lincoln Thrift Ass'n, 577 F.2d 600, 606 (9th Cir.1978) (citations omitted). In Lincoln Thrift Association, the Ninth Circuit, in reviewing the federal district court's denial of a creditor's motion to appoint additional trustees-receivers or, in the alternative, to appoint a creditor's committee to elect new trustee-receivers, concluded that it would be a cumbersome situation at best were this [c]ourt to actively intervene in the operation of the receivership, a position which should be avoided. 577 F.2d at 608-09. The Ninth Circuit further stated that it should not place itself in the position of second-guessing a district court judge who had an opportunity to acquire substantial knowledge of the facts and to evaluate the various legal positions after hearing their merits put forth by the various parties, particularly when there appears to be no clear abuse of discretion. Id. at 609; see also Sec. & Exch. Comm'n v. An-Car Oil Co., 604 F.2d 114, 119 (1st Cir. 1979) (same). The second principle is that a primary purpose of equity receiverships is to promote orderly and efficient administration of the estate by the district court for the benefit of creditors. Sec. & Exch. Comm'n v. Hardy, 803 F.2d 1034, 1038 (9th Cir.1986) (citations omitted). Again, the Ninth Circuit emphasized that: A district judge supervising an equity receivership faces a myriad of complicated problems in dealing with the various parties and issues involved in administering the receivership. Reasonable administrative procedures, crafted to deal with the complex circumstances of each case, will be upheld. A district judge simply cannot effectively and successfully supervise a receivership and protect the interests of its beneficiaries absent broad discretionary power. We would be remiss were we to interfere with a district court's supervision of an equity receivership absent a clear abuse of discretion. Id.