Texas Business Organizations Code 11.403 – Appointment of Receiver for Specific Property
(a) Subject to Subsection (b), and on the application of a person whose right to or interest in any property or fund or the proceeds from the property or fund is probable, a court that has jurisdiction over specific property of a domestic or foreign entity may appoint a receiver in an action:
(1) by a vendor to vacate a fraudulent purchase of the property;
(2) by a creditor to subject the property or fund to the creditor’s claim;
(3) between partners or others jointly owning or interested in the property or fund;
(4) by a mortgagee of the property for the foreclosure of the mortgage and sale of the property, when:
(A) it appears that the mortgaged property is in danger of being lost, removed, or materially injured; or
(B) it appears that the mortgage is in default and that the property is probably insufficient to discharge the mortgage debt; or
(5) in which receivers for specific property have been previously appointed by courts of equity.
(b) A court may appoint a receiver for the property or fund under Subsection (a) only if:
(1) with respect to an action brought under Subsection (a)(1), (2), or (3), it is shown that the property or fund is in danger of being lost, removed, or materially injured;
(2) circumstances exist that are considered by the court to necessitate the appointment of a receiver to conserve the property or fund and avoid damage to interested parties;
(3) all other requirements of law are complied with; and
(4) the court determines that other available legal and equitable remedies are inadequate.
Terms Used In Texas Business Organizations Code 11.403
- Domestic: means , with respect to an entity, that the entity is formed under this code or the entity's internal affairs are governed by this code. See Texas Business Organizations Code 1.002
- Domestic entity: means an organization formed under or the internal affairs of which are governed by this code. See Texas Business Organizations Code 1.002
- Entity: means a domestic entity or foreign entity. See Texas Business Organizations Code 1.002
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Foreign: means , with respect to an entity, that the entity is formed under, and the entity's internal affairs are governed by, the laws of a jurisdiction other than this state. See Texas Business Organizations Code 1.002
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Law: means , unless the context requires otherwise, both statutory and common law. See Texas Business Organizations Code 1.002
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- Person: means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002
- Property: includes tangible and intangible property and an interest in that property. See Texas Business Organizations Code 1.002
(c) The court appointing a receiver under this section has and shall retain exclusive jurisdiction over the specific property placed in receivership. The court shall determine the rights of the parties in the property or its proceeds.
(d) If the condition necessitating the appointment of a receiver under this section is remedied, the receivership shall be terminated immediately, and the receiver shall redeliver to the domestic entity all of the property remaining in receivership.