A court-appointed receiver is a neutral third party a court puts in charge of a company’s assets and operations while litigation is pending or while the company is wound up. In the District of Columbia, the Superior Court’s authority to appoint one over a corporation comes from D.C. Code § 29–312.22, which lets the court appoint receivers to wind up and liquidate or custodians to manage a corporation’s activities and affairs. Seth B. Waxman — a former federal prosecutor who spent 13 years handling fraud and public corruption for the U.S. Attorney’s Office in D.C. — accepts appointments as receiver and represents parties in receivership proceedings.
What is a court-appointed receiver?
A receiver is appointed by a judge, not hired by a party. The receiver answers to the court, takes control of the property or business the order covers, and reports back to the court. Under D.C. Code § 29–312.22(a), the Superior Court may appoint a receiver to wind up and liquidate a corporation, or a custodian to manage it — two different jobs under one appointment power.
Receiver or custodian — what is the difference?
The statute distinguishes them by task. A receiver ends the business; a custodian keeps it running.
| Receiver | Custodian | Bankruptcy trustee | |
|---|---|---|---|
| Statutory task | Wind up and liquidate | Manage the activities and affairs | Administer the estate under the Bankruptcy Code |
| Appointing court | D.C. Superior Court (or a federal court in equity) | D.C. Superior Court | U.S. Bankruptcy Court |
| Source of authority | D.C. Code § 29–312.22; Fed. R. Civ. P. 66 | D.C. Code § 29–312.22 | 11 U.S.C. |
| Triggered by | A judicial dissolution proceeding, or equitable relief in another action | A judicial dissolution proceeding | A bankruptcy filing |
What does the D.C. statute actually say?
D.C. Code § 29–312.22 (Receivership or custodianship):
§ 29–312.22. Receivership or custodianship. (a) Unless an election to purchase has been filed under § 29-312.24 , the Superior Court in a judicial proceeding brought to dissolve a corporation may appoint one or more receivers to wind up and liquidate, or one or more custodians to manage, the activities and affairs of the corporation. The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian. The court appointing a receiver or custodian has jurisdiction over the corporation and all of its property wherever located. (b) The Superior Court may appoint an individual or a domestic or foreign corporation, authorized to do business in the District, as a receiver or custodian. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the cou
D.C. Code § 29–312.22 — Code of the District of Columbia
Can a court act before a full hearing?
Yes. Under § 29–312.21(b), the Superior Court may appoint a receiver or custodian pendente lite — while the case is pending — and may act to preserve the assets and keep the business running until a hearing can be held.
§ 29–312.21. Procedure for judicial dissolution. (a) It shall not be necessary to make shareholders parties to a proceeding to dissolve a corporation unless relief is sought against them individually. (b) The Superior Court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian pendente lite with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing can be held. (c) Within 10 days of the commencement of a proceeding to dissolve a corporation under § 29-312.20(a)(2) , the corporation shall send to all shareholders,
D.C. Code § 29–312.21 — Procedure for judicial dissolution
On what grounds does a D.C. court dissolve a corporation?
Receivership under § 29–312.22 arises inside a judicial dissolution proceeding, so the grounds for dissolution are the gateway. They are set out in § 29–312.20 and include proceedings brought by the Attorney General for the District of Columbia, by shareholders, and by creditors.
Those sections govern business corporations. Nonprofit corporations sit in Chapter 4 of Title 29 and have their own parallel provision, § 29–412.20, which adds a remedy the business-corporation sections do not carry — a constructive trust on compensation already paid to a director, officer or manager. See receivership and the other remedies available against a nonprofit.
§ 29–312.20. Grounds for judicial dissolution. (a) The Superior Court may dissolve a corporation: (1) In a proceeding by the Attorney General for the District of Columbia if it is established that the corporation: (A) Obtained its articles of incorporation through fraud; or (B) Has continued to exceed or abuse the authority conferred upon it by law; (2) In a proceeding by a shareholder if it is established that: (A) The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered, or the activities and affairs of the corporation can no longer be conducted to th
D.C. Code § 29–312.20 — Grounds for judicial dissolution
How do federal equity receiverships differ?
Federal courts appoint receivers under their equity powers, with procedure supplied by Federal Rule of Civil Procedure 66. These appointments commonly arise in enforcement actions where a regulator asks the court to place a company and its assets under neutral control. Federal receiverships are a distinct track from the D.C. Superior Court dissolution route described above.
Frequently asked questions
Who chooses the receiver?
The court does. Parties may propose candidates, but the appointment and the receiver’s powers come from the court’s order, and § 29–312.22(a) requires a hearing on notice before a receiver or custodian is appointed.
Does a receivership mean the company is bankrupt?
No. A receivership is a separate remedy from bankruptcy. A company can be placed in receivership without any bankruptcy filing, and the appointing court retains jurisdiction over the receivership.
Can a receiver keep operating the business?
Under § 29–312.21(b) the court may act to preserve assets and carry on the business until a full hearing. Under § 29–312.22 a custodian is appointed specifically to manage the company’s activities and affairs, while a receiver’s statutory task is to wind up and liquidate.
Who pays the receiver?
Receiver compensation is set by the appointing court and is ordinarily paid from the receivership estate. The specific terms come from the appointment order in each case.
Sources and legal authorities
- D.C. Code § 29–312.20 — Grounds for judicial dissolution
- D.C. Code § 29–312.21 — Procedure for judicial dissolution
- D.C. Code § 29–312.22 — Receivership or custodianship
- Fed. R. Civ. P. 66 — Receivers
This page describes D.C. and federal law in general terms and is not legal advice. Statutes change; read the current text at the links above. Past results do not guarantee or predict a similar outcome in any future matter.
Discuss a receivership
To discuss an appointment, a pending receivership, or a dissolution proceeding, call (301) 901-3109 or use the contact page. Related: What is a court-appointed receiver? · Receiverships in financial-fraud cases · Business Litigation · Internal Investigations.