Law Offices of Edythe L. Bronston

Selected Issues in Taking, Holding and Enforcing Real Property Security
By Edythe L. Bronston

A. Status of Receiver: A receiver is an agent of the court, acting for the court, holding assets in custodia legis, generally to preserve the status quo, but sometimes to maximize benefit to estate, depending on the type of receivership. The receiver is neutral, represents and is a fiduciary to all parties who are ultimately shown to have interest in the property or fund which comprises the receivership estate, or the proceeds of same. The receiver obtains the right to possession of the property, but not title.

Receiverships are an ancillary remedy and are appointed only where authorized by statute or equity. The statutory bases run through the California Codes. Both the California Rules of Court and the Local rules should always be consulted.

Where a complaint fails by its allegations to show that the conditions required by law have been complied with, an order appointing a receiver is void for all purposes. In re Stein, 14 Cal.App.2d 303 (1936); Rondos v. Superior Court, 151 Cal.App.2d 190 (1957)

Historically, imposition of a receiver has been considered a harsh, expensive remedy. It is easier today to obtain a rents, issues and profits receiver, but the court always has discretion and will often balance the equities.

B. Appealability: CCP §904.1(a)(7); City and County of San Francisco v. Shers, 38 Cal.App. 4th 1831 (1995)].

a. Order granting appointment: Appealable under CCP §904.1(a)(7).

b. An order denying appointment is non-appealable.

c. An order refusing to vacate a prior appointment is ordinarily non-appealable. (9 Witkin Cal. Proc. (3rd. 1985) Appeal, §99, p.119).

d. An order discharging a receiver is appealable when it has the effect of being a final judgment. Hibernia S&L Soc. v. Ellins Estate Co., Cal. 216 Cal. 280, 281-282 (1932).

e. An order following a final appealable judgment is appealable under CCP §904.1(a)(2) if the following two requirements are met:

(1) Issues raised by appeal from order are different from those arising from appeal from judgment; and

(2) The order must either affect the judgment or relate to it by enforcing it or staying its execution. Lakin v. Watkins Associated Industries, 604 Cal.4th 644, 651-652 (1993).

f. An order appointing a receiver in aid of execution may be appealable as to the particular receiver.

C. Advantages

There are many advantages to having a receiver appointed, not the least of which is that the lender is insulated from being deemed a mortgagee in possession. See Civil Code §2938. This protects a lender from the increased exposure of application of a prudent business standard and responsibility for losses caused by the lender's negligence. In addition, the receiver will ensure that the property is insured and maintained and, in the case of a non-rents receivership, that the business is appropriately operated. In addition, a receivership order can specify that senior liens are to be kept current and real property taxes paid. Further, the lender will be kept informed as to the status of the property or business.

Conversely, a receivership is an additional layer of expense for which the lender may ultimately be held liable, should the receivership estate be insolvent. Ephraim v. Pacific Bank, 129 Cal. 589, 592 (1900). In addition, should anything out of the ordinary arise, a receiver will undoubtedly petition his or her appointing court for instructions, which can lead to delay and extra expense.

n.b.: Senate Bill 947, effective January 1, 1997, repealed old Civil Code §2938 and added a new Section 2938, which deals with perfection of a lender’s rights to rents, issues and profits of real property, and also addresses in Subsections (c) and (d) the rights of a lender/assignee of rents to collect and receive rents, issues and profits which have accrued but remain unpaid and uncollected on the date on which an enforcement step is taken. Those enforcement steps include appointment of a receiver, obtaining possession of the rents, issues or profits, delivery of a written demand to one or more tenants, and delivery of a written demand to the assignor/borrower. The statute, which applies to contracts entered into on or after January 1, 1997, also provides that any of the enforcement actions taken by a lender/assignee do not have the effect of making that assignee a mortgagee in possession unless the assignee obtains actual possession of the real property. Further, rents collected under this statute may be received and applied by the lender/assignee without the risk of a CCP §726 violation. Be aware, however, that although “perfection” protects the security interest against an intervening third party, an additional enforcement step is mandated to allow the creditor to begin collecting the assigned rents. Federal National Mortgage Assn. V. Bugna, 57 Cal.App. 4th 5291 (1997). According to one California Appellate Court, enactment of new Section 2938 did not alter existing California law in that respect. Under new Civil Code §2938 (g) once a lender has availed itself of these enforcement rights, the borrower/assignor can demand that the rents be used for the reasonable costs of protecting and preserving the property. Lenders will probably want a receiver to oversee this process . . . there is new statutory authority for appointment of such a receiver pursuant to CCP §564(b)(11).

D. There are many different types of receiverships, including the following:

1. Rents, issues and profits receiverships, appointed under the specific performance provision of a deed of trust or assignment of rents: CCP §564(b)(8); Mines v. Superior Court, 216 Cal. 776 (1932).

2. To take possession of real property, pending judicial foreclosure, where property is in danger of being lost, removed, or materially injured, or conditions in deed of trust or mortgage have not been performed, and property is probably valued at less than the debt. CCP §564(b)(2).

a. Under CCP §564(b)(2), an entirely different burden of proof is required, to show:

(1) That the real property is in danger of being lost, removed, or materially injured; or

(2) That the loan is in default and the property is probably insufficient to discharge the debt.

(a) Necessitates evidence of the property's current value.

b. A lesser showing is required under CCP §564(b)(8) than under (b)(2). By asserting the provision in deed of trust or assignment, and the default, a lender has established a prima facie, but rebuttable right to areceiver. Barclays Bank v. Superior Court, 69 Cal.App.3d 593, 602(1977); Santa Croce Bros. v. Edgewater-Santa Clara, Inc., 242Cal.App.2d 584, 588 (1966). The creditor is not required to showthat property is insufficient to discharge the debt. Appointment isalways discretionary, however, and the recital in deed of trust or assignment has evidentiary weight, but is not binding on courts. Barclays Bank, supra, at p. 602.

3. In an action by a vendor to vacate a fraudulent purchase of property, or by a creditor to subject any property or fund to the creditor’s claim, or between joint owners of property, where the party’s right or interest is probable and the property or fund is in danger of loss, removal or material injury. CCP §564(1).

4. To preserve community property subject to a marital dissolution; Family Code §290..

5. To preserve property, pending a corporate dissolution; Corporations Code §§ 1801(e), 1803; CCP§§564(b)(5), 565.Upon dissolution, to take charge of the estate and collect the debts and property due and belonging to the corporation , pay the outstanding debts and divide the monies and property remaining among the shareholders.

6. To preserve property pending a partnership or joint venture dissolution. CCP §564(b)(1); Corporations Code §15028.

7. In an unlawful detainer action. CCP §564(b)(6).

8. To enforce a judgment. CCP §§708.610-708.630; 564(b)(3)(4).

a. To dispose of property according to a judgment or to preserve it during the pending of an appeal. CCP §564(b)(4).

b. To collect, expend, and disburse rents during redemption period following judicial foreclosure. CCP §§564(b)(4); 729.090(a).

(1) During the redemption period, a receiver may be appointed to collect rents, but may not take possession, as the mortgagor/trustor retains the right to possession until the end of the statutory redemption period. CCP §729.090(a).

c. To collect accounts receivable.

9. At the request of the Office of Statewide Health Planning & Development, or the Attorney General, pursuant to Section 436.222 of the Health and Safety Code. CCP §564(b)(7).

10. At the request of the Public Utilities Commission pursuant to Section 855 of the Public Utilities Code. CCP §564(b)(7).

11. In an action by a secured lender for specific performance of an assignment of rents provision in a deed of trust, mortgage, or separate assignment; the appointment may be continued after entry of a judgment, if appropriate to protect, operate or maintain real property encumbered by the deed of trust or mortgage or to collect the rents therefrom during the pendency of a nonjudicial foreclosure sale. CCP §564(b)(10).

12. General Equity Receivers.

This type of receivership is totally different from a rents, issues and profits receiver. An equity receiver is generally appointed in connection with an action brought by a governmental regulatory agency. The receiver will take possession of all assets, for the benefit of all parties ultimately shown to have an interest in those assets. This type of receiver can be likened to a bankruptcy trustee, who preserves and generally liquidates a pool of assets. A very high burden of proof is required to obtain this type of appointment. Creditors of a defendant whose assets become part of the receivership estate are generally stayed by an injunction which is issued by the appointing court as part of the appointing order. The appointing order should be recorded in all counties where real property is located.

13. Environmental Remediation Receiver.

To enter upon and inspect real property security on behalf of a lender, to determine the existence of hazardous materials, upon reasonable notice. CCP §564(c); Civil Code § 2929.5. As the receiver has no authority to do anything but investigate, it is questionable whether there is sufficient benefit to justify the expense.

Practice Tip: If representing a lender, the loan documents should include as an event of default, triggering appointment of a receiver, any breach of various environmental provisions, regardless of the existence of a monetary default. Documents should further provide that a lender may seek appointment of a receiver under CCP §564(b)(8) to operate and manage the property, take custody of all accounts, spend rents to abate the problem, and take any other necessary action to enforce compliance with the environmental provisions, including negotiating with governmental authorities. The receiver can thus have authority to incur the risks and obligations ordinarily incurred by owners of the property without any personal obligation.

If plaintiff/lender wishes the receiver to undertake to operate a contaminated property, the receiver will undoubtedly demand a broad indemnification from the lender, despite the new CERCLA secured creditor exemption/EPA rules. [42 USC §9601 (20)(E)]. This may result in an inherent conflict. The receiver should petition the Court for instructions, on notice to all creditors.

14. Take charge of fraudulently transferred property. Civil Code §3439.07(3)(B).

15. Federal Receiverships.

Federal receiverships may impose a higher burden of proof. Factors include adequacy of security and financial position of mortgagor. N.Y. Life v. Watt West Investment, 755 F.Supp. 287 (E.D. Calif. 1991); Aviation Supply Corp. v. R.S.B.I. Aerospace, Inc., 999 F.2d 314 (8th Cir. 1993).

Federal law mandates that a receiver appointed in any court of the United States must manage and operate the property in his or her possession as receiver according to the requirements of the valid laws of the state in which such property is situated, in the same manner that the owner or possessor thereof would be bound to do if in possession thereof. 28 U.S.C. §959(b). Note that a federal receiver may be sued without permission of the receivership court, with respect to any acts or transactions in carrying on business connected with the receivership property. 28 U.S.C. §959 (a)

D. Powers of a Receiver.

A receiver’s powers are defined by statute, by the appointing order and by subsequent orders on petitions for instruction. Because a receiver’s decisions are backed by the authority of the appointing court, a receiver should be chosen with care, as it is always more difficult to address the effect of acts already concluded. The receiver’s powers may include (C.C.P. §568):

a. Bringing and defending actions;

b. Investigating and bringing property into receivership estate;

(1) May bring a party before court for examination.

c. Collecting rents, collecting and compromising debts, making transfers, doing any acts as court may authorize.

d. Selling real or personal property of the receivership estate (CCP §568.5).

(1) A receiver is not bound by Commercial Code standards in selling personal property.

(2) Security Pacific National Bank v. Geernaert, 199 Cal.App.3d 1425, 248 Cal.Rptr. 712 (1988): UCC §9504 applies onlywhere sale of collateral is by secured party, not where sale ismade by court-appointed receiver.

(3) In the absence of a statute providing otherwise, a court mayauthorize a receiver to sell receivership property at either a private or public sale. People v. Riverside University. 35Cal.App. 3d 572, 583; 111 Cal. Rptr. 68 (1973).

(4) Since the court may authorize private sales in the first instance, it has the power to approve sales so made withoutprior authorization. (Id., at p. 586).

e. Where appointment is made pursuant to a contractual provision, the scope is delineated in that contract.

f. Query whether a receiver can usurp an owner's position on the Board of a homeowners' association. A cautious receiver will routinely obtain a court order prior to doing any acts which may be found at all questionable.

F. Qualifications of a Receiver (CCP §566).

1. Not a party, attorney of a party , or person interested in action or related to any judge by consanguinity within the third degree, without written consent of the parties.

2. An individual, not a corporation.

3. Reviewed under an abuse of discretion standard. City and County of San Francisco v. Daley, 16 Cal.App.4th 734, 744 (1993).

G. Appointing Orders (Check Local Rules and California Rules of Court).

The appointing order establishes the parameters of a receiver's duties and powers. The ultimate goals and any special circumstances should be considered by a plaintiff in drafting the order. It is recommended that a draft of the order be submitted to both the client and the proposed receiver for comments.

All loan documents should be carefully reviewed prior to drafting a complaint and motion for appointment of receiver, especially regarding notice requirements contained therein. Orders should include authorization to:

1. Take possession of books and records (both in hands of defendant and third party);

2. Collect sums owing or coming due to defendant;

3. Enter into contracts and agreements necessary to maintain and preserve property;

4. Employ eviction service, without further order, to pursue unlawful detainer action;

5. Open bank accounts;

6. Pay obligations of receivership estate;

7. Sell real or personal property (if loan documents allow and if circumstances so warrant), subject to confirmation by the court;

8. Employ specific agents, employees, and professionals (if warranted);

9. Institute and defend actions, upon court approval;

10. Operate business at a loss, if appropriate; in such a case, Order should address responsibility for financing;

11. Address tenant issues:

a. tenant improvements

b. leasing commissions

c. Dover/subordination issues

12. Extend time for filing of inventory beyond statutory 10-day period.

The Order should also include:

a. Complete description, common and legal, of real property;

b. Instructions to receiver as to retention of excess funds;

c. A provision authorizing receiver to turn over real property (i) upon foreclosure, to the successful bidder, upon receipt of a copy of a trustee’s deed; (ii) upon notice of cure of default or notice that plaintiff has accepted a deed in lieu of foreclosure; or (iii) upon receipt of a copy the of dismissal of the complaint. See Los Angeles Superior Court Rule 9.53, 9.54.)

d. A method for determining receiver's compensation; and

e. A provision directing receiver to file bond as set by court.

H. Expenses of Receiver

CCP §568: A receiver's powers include the right to make transfers and do such acts as the court may authorize respecting property in receivership estate. These powers include the right to borrow money and issue receiver's certificates to carry out the primary object of the receiver's appointment; i.e., the care and preservation of the property. Title Ins. etc. v. California Dev. Co., 171 Cal. 227, 231 (1917).

1. Receivers often need to borrow money to operate a receivership estate. Usually, however, the present lender is the only source. Lenders should either obtain a receiver's certificate or an order deeming an advance under its deed of trust as obligatory, to ensure priority of such funds.

2. Requires notice to all entities which might have an interest in the property, including mechanics' lien claimants.

a. Pull title report and do a UCC search, to ensure proper notice.

3. A receiver's certificate is evidence of a receiver's debt, backed by all assets of the receivership estate and by the court; Gardner v. Grand Beach Co., 48 F.2d 491 (1931); Atlantic Trust Co. v. Chapman, 208 U.S. 360, 28 S.Ct. 406 (1902).

a. Requires court authorization, after notice.

b. In the nature of an administrative claim. Shares first priority position, pro rata with expenses of receivership estate, securing loan with all assets of receivership estate.

c. Takes precedence over all existing unsecured debt. Analogous to administrative claim in bankruptcy.

d. Court can actually order that receiver's certificates take priority as a senior lien on specific property (Title Ins. v. Calif. Dev., supra). Presumably, in such a case, a lender can obtain title insurance to ensure that position, provided that there is evidence of proper notice.

(i) Requires full notice.

(ii) Very unlikely, if present secured creditors object, unless court can be convinced that such a “priming” lien is protecting the interests of the senior lienholder.

4. Advances under present loan documents.

a. Not recommended unless loan can be assured of priority as an obligatory advance. Consider moving for an order declaring such an advance to be obligatory.

b. A good tactic, if there are potential priority claims against the property, e.g., mechanics' liens.

(i) Some courts are refusing to authorize payment of receivership expenses unless a receiver's certificate has been issued.

I. Priority of receiverships and competing rights to rents, issues and profits.

1. Where a junior lienholder has obtained a receiver, the benefit runs to the senior, once the senior's lien has been clearly asserted. Lovett v. Point Loma Development, 266 Cal. App.2d 70 (1968). (Until then, junior lienholder can keep rents under its own rents, issues and profits clause). See new Civil Code §2938(h), which codifies this holding as to contracts entered into after January 1, 1997.

2. Sumitomo Bank of California v. Davis, 4 Cal.App.4th 1306; 6 Cal.Rptr. 381 (1992).

a. State court not bound by federal court's denial of receiver in connection with judicial foreclosure of third deed of trust.

b. Senior lender entitled to appointment of state court receiver in connection with judicial foreclosure of first deed of trust.

3. A court may order a receiver to make regular payments to a senior lienholder. Lovett v. Point Loma Dev. Corp., 266 Cal.App.2d 70 (1968).

J. Ethics

1. Receiver is agent of the Court, not the Plaintiff, and must maintain the property to the benefit of all who may show themselves to have an interest.

2. Goal is to preserve status quo or maximize return to estate and not to benefit any party while action is pending.

3. Receiver may not utilize Plaintiff's counsel. CRC, Rule 353(b). Note, however, that some courts are allowing plaintiff’s counsel to file a receiver’s final report and account, so long as the receiver files a declaration with the final report and account, connoting personal knowledge and under penalty of perjury.

4. Receiver's counsel may not be compensated by receivership estate without prior court authorization of employment; where an appointing order or local rule allows for payment of all expenses of the receivership estate upon notice to interested parties, payment can be made to all employed professionals, but final approval of fees is required, after submission by noticed fee application. CRC, Rule 353(d).

5. Query whether Plaintiff has duty of inquiry re proposed receiver's character and competence.

K. Receivers/Bankruptcy

1. 11 U.S.C. §543 requires turnover of property held by custodian.

2. Section 543(d) exception authorizes custodian to remain in possession of property if in best interest of creditors.

3. Policy of Office of United States Trustee:

a. Trend in Central District is to oppose all Section 543(d) motions and to oppose appointment of receiver as Chapter 11 Trustee.

4. Once a bankruptcy has been filed, a receiver should turn over property to the bankruptcy estate unless the receiver is told by the plaintiff that an application for an order shortening time to hear a Section 543(d) motion is being immediately made. The receiver should not expose himself or herself to potential liability to the bankruptcy court. The receiver should confirm in writing to all interested parties that he/she has been requested by the plaintiff to retain possession of the property, as the plaintiff is making an ex parte application for an order shortening time for hearing under Section 543(d). In such a case, the receiver should not wait longer than one week to turn over property, if the ex parte application has not been made.

5. After turnover, the receiver should make a motion in Bankruptcy Court for approval and payment of his or her fees under 11 U.S.C. §543(c)(2).

L. Impact of One Action Rule: CCP §726

1. CCP §564 was amended in 1992, adding subsection (d) which provides that any action by a secured lender does not constitute an action within the meaning of Section 726(a).

2. Prudent course is to forego payover of rents collected until receivership has been terminated and receiver's final report and account has been approved. (See discussion in point C, at page 3, however, regarding new Civil Code §2938, effective as to contracts entered into on or after January 1, 1997.)

3. Omission of Rents, Issues & Profits Provision. If a security instrument lacks a rents and profits clause, a receiver appointed under CCP §564(b)(2) may be limited to preserving the property from waste and may not be entitled to claim rents except as needed to avoid waste, since the right to rent and the right to title are different interests. Walmsley v. Holcomb, 61 Cal.App.2d 578 (1943). Without a rents, issues and profits clause, therefore, rents from real property are treated as a separate and unencumbered asset. Snyder v. Western Loan & Building Co., 1 Cal.2d 697 (1934). Even a stipulation in the security instrument providing for a receiver upon default is of little help without a rents, issues and profits clause, as courts have held that jurisdiction to appoint a receiver cannot be conferred by consent. Baker v. Varney, 129 Cal. 564 (1900); Barclays v. Superior Court, 69 Cal.App.3d 593 (1977).

M. Characterization and Collection of Security Deposits

1. Rarely, if ever, available.

2. Borrowers will attempt to replenish security deposit account from lender's rents. Receiver should not permit.

3. Borrowers have personal liability to both residential and commercial tenants if security deposits are not returned to tenant or transferred to receiver within a reasonable time after receiver's appointment. CC §1950.5(g); §1950.7(d).

4. A commercial tenant's claim to a security deposit is senior to the claim of any of the landlord's creditors, except a trustee in bankruptcy. CC §1950.7(b).

5. Upon receipt of security deposits, receiver has all rights and obligations of the landlord with respect to the payment or deposit. CC §1950.7(e)

6. Lenders should request an accounting from date of default, in order to ascertain status of security deposits.

7. Where a borrower fails to comply with a TRO mandating turnover of security deposits in borrower’s possession, the receiver has the burden to demonstrate Defendants’ ability to comply. If that burden is not met, there is no support for a contempt order. Cassil v. Superior Court of L.A. County, Clayton R. Cook, Real Party in Interest), 37 Cal.App.4th 1081, 44 Cal.Rptr. 2d 267 (1995) .

Practice Tip: Receiver should petition appointing court for authority to take deposition and take deposition prior to filing an order to show cause re: contempt; otherwise, borrower may assert 5th Amendment right against self-incrimination.

N. Use of Rents by Receiver.

1. Rents Collected Should be Held. To be safe, funds collected by a receiver should be left in the receiver's hands and unapplied to the debt pending foreclosure, unless all debtors and junior lienholders have expressly consented in writing to a different treatment of the funds.

a. If the receiver’s appointing order authorizes or mandates his or her payment to a lender from rents collected, the receiver has no liability for any damages caused to such lender by application of the rents, since the receiver is operating under a court order.

b. See new Civil Code §2938: for deeds of trust executed after January 1, 1997, there is no CCP §726 violation for application of rents to debt.

2. Special Circumstances

a. Contaminated sites. Query whether a receiver may use rents collected to clean up a contaminated site pre-foreclosure? Receivers should be extremely cautious to ensure that their appointing order expressly provides for such expenditures and further provides that the receiver has no personal liability. A wise receiver will insist upon employment of counsel for advice in such circumstances. (Loan documents should be carefully reviewed to ensure that the appointing order does not go beyond the scope of the lender's rights.)

O. Receiver's Privileged Communications: Communications between receiver and counsel are presumed confidential. The attorney-client privilege is broad enough to protect the receiver even from appointing judge. Shannon v. Superior Court of Stanislaus County, 217 Cal.App.3d 986, 266 Cal.Rptr. 242 (1990).

P. Termination of Receivership

1. Court order required. Check Local Rules.

2. Final report and account must be approved and bond exonerated.

a. Ten days written notice to all parties (Rule 353(d), California Rules of Court). n.b. - the Los Angeles Superior Court has required an additional five days for mailing.

b. Services performed and fees requested must be itemized. Hozz v. Varga, 166 Cal.App.2d 539 (1958).

c. Upon court approval of the receiver's final report and account, the receiver will be discharged and his or her bond exonerated.

d. Effect of court order:

(1) Bars subsequent action against receiver, by all parties who received notice, for Receiver’s failure to properly perform duties. Aviation Brake Sys. Ltd. v. Voorhis, 133 Cal.App.3d 330, 183 Cal.Rptr. 766 (1982).

Q. Effect of Receiver's Acts Upon Beneficiary/Mortgagee

1. Appointment of a receiver does not make a mortgagee/beneficiary a mortgagee in possession. Bank of Am. Nat’l Trust & Sav. Ass'n v. Bank of Amador County, 135 Cal.App. 714 (1933); rather, the imposition of a receiver protects a lender from such a risk.

2. Conversely, a receiver's misconduct does not result in liability to a beneficiary/mortgagee. Tourny v. Bryan, 66 Cal.App. 426 (1924).

R. A Receiver's Risks

A receiver's immunity from liability to a bankruptcy estate has been held to depend upon the totality of circumstances in which an order is drawn. In the case of In re Sundance Corp., Inc., 149 B.R. 641 (Bkrtcy.E.D.Wash. 1993), a mortgagee's successor in interest and the mortgagor's stockholders objected to a receiver's motion brought in the mortgagor's Chapter 11 bankruptcy case for approval of his accounting, termination and discharge of his custodianship, exoneration of his bond, and fees and costs. The objection was based upon an assertion that the receiver was liable for clean-up costs in connection with release of hazardous substances at the mortgagor's orchard. The court stated that an order's immunizing power varies according to the extent that a court is fully informed as to the nature of the options available for its consideration, and that notice and opportunity is given to interested parties to participate in the decision-making process.

Using language which has undoubtedly struck fear into the hearts of all receivers, with the result that receivers should probably require a petitioning lender to indemnify them for any such costs, the court stated:

"but if a receiver did not analyze the risks inherent in the various known options and bring the risks to the attention of the court and the parties for their consideration in the decision-

making process, then the court order will not provide immunity and a receiver will have to defend itself on the merits on whether it acted with reasonable business judgment."

Cf. Gregory v. U.S., 942 F.2d 1498 (10th Cir. 1991), where it was held that a trustee was entitled to absolute immunity for executing bankruptcy court orders relating to collection and disposition of estate property.

While a trustee and a receiver have different status, in that a receiver holds assets in custodia legis, while a trustee does not, it would appear that a receiver operating as a bankruptcy custodian should be entitled to the same protections as a trustee in bankruptcy.

See also (1) New Alaska Development Corp. v. Guetschow, 869 F.2d 1298, 1303-1305 (9th Cir. 1989), holding that a state court receiver is entitled to “absolute derivative judicial immunity”, where a receiver is acting in a normal receivership function, as the receiver is an agent of the court; and (2) Credit Managers Association v. Kennesaw Life and Acc. Ins., 25 F.3d 743,750-751 (9th Cir. 1994), where the Ninth Circuit held that the general rule in California is that a judgment against a receiver operates only as an established claim against assets in the receiver’s possession and is not enforceable by execution, but then stated that a receiver can be held personally liable for his misconduct or mismanagement of the receivership estate.