Did You Know That a Court Appointed Receiver Cannot Be Held Personally Liable When He or She Screws Up a Business?

By Fredrick P. Niemann of Hanlon, Niemann & Wright, a Freehold Township, Monmouth County, New Jersey Business & Corporation Law Attorney

In a recent case, a Court appointed receiver was sued over the actions they allegedly took during their tenure administrating rental property.  Plaintiff’s case was dismissed because the United States Supreme Court has ruled that legal “action(s) against a Court appointed receiver are (in essence) actions against the receivership, and/or the funds in the hands of the receiver, and  his or her decisions regarding contracts, deficiencies, and claims of  negligence are official and in nature, not personal and are therefore immune.  As a request, judgments against him or her as a receiver are payable only from the funds in his/her possession.

Lawsuits against the receiver are, lawsuits against the receivership, and a court-appointed receiver cannot be personally liable for the consequences of decisions which accrue during the course of the receivership.  Instead economic consequences are payable only from the business on real estate itself.         The take-away is that when taking action against a court-appointed receiver understand he/she cannot be personally liable for the contractual negotiations or lease which results from their control of the rental property.

To discuss your NJ Real Estate, Business and Corporation Law matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.

 

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