O.C.G.A. § 9-8-4 (2019)

Annotations

JUDICIAL DECISIONS Receivers should by no means be lightly appointed. Warner v. Warner, 237 Ga. 462, 228 S.E.2d 848, 1976 Ga. LEXIS 1265 (1976). Appointment of receiver is allowable only in extreme cases, and under circumstances where the interest of creditors is exposed to manifest peril. Bainbridge Power Co. v. Ivey, 173 Ga. 18, 159 S.E. 660, 1931 Ga. LEXIS 247 (1931); Templeman v. Templeman, 173 Ga. 743, 161 S.E. 261, 1931 Ga. LEXIS 392 (1931); White v. Malone, 174 Ga. 886, 164 S.E. 672, 1932 Ga. LEXIS 163 (1932); Stephens v. Stephens, 220 Ga. 22, 136 S.E.2d 726, 1964 Ga. LEXIS 437 (1964). Appointment of receiver to prevent imminent wrong. - The high prerogative act of taking property out of the hands of one, and putting it in pound, under the order of a judge, ought not be taken, except to prevent manifest wrong imminently impending. Templeman v. Templeman, 173 Ga. 743, 161 S.E. 261, 1931 Ga. LEXIS 392 (1931); Frankel v. Frankel, 212 Ga. 643, 94 S.E.2d 728, 1956 Ga. LEXIS 478 (1956); Cleveland v. Tully, 232 Ga. 377, 207 S.E.2d 18, 1974 Ga. LEXIS 957 (1974). Appointment of receiver proper to protect assets. - Trial court did not abuse the court’s discretion in issuing an interlocutory injunction enjoining officers from disposing of any of the documents or assets of a corporation and continuing a

receivership because the officers controlled the assets that were a subject of the litigation, raising the possibility that the assets could be dissipated before the litigation is resolved; although the officers made several vague arguments about the powers granted to the receiver, the officers failed to show that the trial court abused the court’s discretion in granting those powers. Pittman v. State, 288 Ga. 589, 706 S.E.2d 398, 2011 Ga. LEXIS 149 (2011). There must be some necessity for appointment of receiver, in way of protecting rights of parties by preserving the property or assets. The necessity for a receiver must clearly appear, and a receiver will not be appointed where no advantage to the party seeking a receiver can be gained thereby. Bainbridge Power Co. v. Ivey, 173 Ga. 18, 159 S.E. 660, 1931 Ga. LEXIS 247 (1931). A receiver should not be appointed to take possession of property unless it is clearly made to appear that a receiver is required in order to protect the rights of those interested in the property. Bird v. General Disct. Corp., 194 Ga. 282, 21 S.E.2d 651, 1942 Ga. LEXIS 578 (1942); Jones v. Wilson, 195 Ga. 310, 24 S.E.2d 34, 1943 Ga. LEXIS 481 (1943). Appointment of auditor not receiver. - In an action to judicially dissolve a limited liability company, the defendant’s claim that the trial court erred by appointing the receiver without mak-

ing a finding that there was a clear and urgent need for such extraordinary relief as placing the company in a receivership failed because the trial court appointed an auditor to investigate matters of account, not a receiver. A&M Hospitalities, LLC v. Alimchandani, 351 Ga. App. 310, 828 S.E.2d 615, 2019 Ga. App. LEXIS 263 (2019), cert. denied, No. S19C1563, 2020 Ga. LEXIS 111 (Ga. Feb. 10, 2020). Absent necessity, no change in property status pending final decree. - No matter how strong the apparent equity of the complainant may be, if there is no necessity for a receivership, the courts will not change the status until final decree. Jones v. Wilson, 195 Ga. 310, 24 S.E.2d 34, 1943 Ga. LEXIS 481 (1943); Furr v. Jordan, 196 Ga. 862, 27 S.E.2d 861, 1943 Ga. LEXIS 434 (1943); Conner v. Yawn, 200 Ga. 500, 37 S.E.2d 541, 1946 Ga. LEXIS 417 (1946); Jue v. Joe, 207 Ga. 119, 60 S.E.2d 442, 1950 Ga. LEXIS 428 (1950); Liddell v. Johnson, 213 Ga. 752, 101 S.E.2d 755, 1958 Ga. LEXIS 271 (1958). Allegation that defendant is insolvent is insufficient alone to require appointment of receiver. Insurance Ctr., Inc. v. Hamilton, 218 Ga. 597, 129 S.E.2d 801, 1963 Ga. LEXIS 270 (1963). Fact alone that defendant’s assets lie outside state also insufficient. - Where the defendant has property and assets outside this state, that fact alone does not authorize the appointment of a receiver. Bainbridge Power Co. v. Ivey, 173 Ga. 18, 159 S.E. 660, 1931 Ga. LEXIS 247 (1931). Where evidence is conflicting, trial court’s discretion to appoint receiver is broad. Warner v. Warner, 237 Ga. 462, 228 S.E.2d 848, 1976 Ga. LEXIS 1265 (1976). Court may appoint temporary receiver before interlocutory hearing. - If the danger of dissipating assets before an interlocutory hearing can be had is great, the court in the exercise of sound discretion may, without notice, grant a temporary restraining order or appoint a temporary receiver in order to preserve the status until the interlocutory hearing. Edwards v. United Food Brokers, Inc., 195

Ga. 1, 22 S.E.2d 812, 1942 Ga. LEXIS 686 (1942). Assets not taken from estate representative except where danger of loss. - A receiver should not be appointed to take the assets out of the hands of the legally appointed representatives of an estate except in cases of manifest danger of loss or destruction, or material injury to the assets. Pinson v. Beamer, 179 Ga. 503, 176 S.E. 376, 1934 Ga. LEXIS 319 (1934); Furr v. Jordan, 196 Ga. 862, 27 S.E.2d 861, 1943 Ga. LEXIS 434 (1943). Administrator’s bond may provide sufficient protection to heirs. - Where the heirs allege that the administratrix of the estate is guilty of fraud and collusion with respect to the sale of property, and that a receiver should be appointed to reclaim and resell the property, but the heirs do not want to prevent the ultimate sale of the property, the question is merely one of damage resulting from an alleged breach of duty by the administratrix. In this case, her bond as administratrix would furnish an adequate remedy to the heirs, since they could not possibly be in such danger of loss or injury as to require either a receivership or an injunction for the protection of their interests. Conner v. Yawn, 200 Ga. 500, 37 S.E.2d 541, 1946 Ga. LEXIS 417 (1946). Administrator’s failure to manage estate held insufficient grounds for receivership. - Allegations that there was a farm on a tract of land belonging to an estate of which petitioners were heirs, and that since the administrator had moved away and ceased to manage the estate, there was no one looking after it, were not sufficient to authorize the appointment of a receiver. Griner v. Wilson, 181 Ga. 432, 182 S.E. 592, 1935 Ga. LEXIS 114 (1935). Receiver properly denied. - Since the evidence did not show that the rights of the parties could not be fully protected without the appointment of a receiver, a trial court did not err in refusing to appoint a receiver; a lender did not present any evidence of insolvency, waste, mismanagement, or misappropriation of assets on the part of the owners of a restaurant. Patel v. Patel, 280 Ga. 292, 627 S.E.2d 21, 2006 Ga. LEXIS 150 (2006).

Trial court’s order denying a shareholder’s request for the appointment of a receiver for a corporation under O.C.G.A. § 9-8-1 was proper because there was no showing that the appointment of a receiver could have reversed an improper tax election by the corporation and, although the corporation’s president inaccurately represented before 2000 that the president was the sole owner of the corporation, the corporate structure had clearly been recognized since that time, and it was not shown that these prior representations affected the current or future operation of the corporation; further, although the funds for a building’s purchase were paid from the president’s personal account, it was undisputed that the building was now owned by the corporation, and the evidence was that improper corporate expenditures had been adjusted in the audit so as to ensure that the shareholder’s proper share of the corporation was accurately measured. There was no showing that the president or the corporation were insolvent, or that the shareholder would not have been able to ultimately gain the shareholder’s appropriate share of the corporation’s value. Treu v. Humanism Inv., Inc., 284 Ga. 657, 670 S.E.2d 409, 2008 Ga. LEXIS 987 (2008). Receivership permissible in suits between cotenants of real estate. - In a suit between cotenants of real estate to obtain equitable relief with respect to the common property, a receiver may be appointed where the plaintiff’s title or right is probable and a receivership is necessary for the preservation of the subject matter of the suit or for the protection of the interests of the parties therein pending the litigation. Waycross Military Ass’n v. Hiers, 209 Ga. 812, 76 S.E.2d 486, 1953 Ga. LEXIS 419 (1953); Warner v. Warner, 237 Ga. 462, 228 S.E.2d 848, 1976 Ga. LEXIS 1265 (1976). Necessity must be shown. - Where, on the trial of an equitable petition for the partition of real estate and accounting between tenants in common, the evidence shows that the defendant against whom the charges of mismanagement were made is solvent, and no necessity for a receivership is proved, it is error to appoint receivers to take possession of and to

hold and manage the property in question pending final disposition of the case. Liddell v. Johnson, 213 Ga. 752, 101 S.E.2d 755, 1958 Ga. LEXIS 271 (1958). Receivership improper where no clear evidence of defendant’s misuse. - Where the defendant was a wealthy person, and there was no evidence tending to show that the defendant was selling, concealing, wasting, mismanaging, or making any effort to dispose of or encumber any part of the defendant’s holdings or had any intention to do so, there was no clear and urgent necessity for the appointment of receivers, and it was an abuse of judicial discretion and therefore erroneous for the trial judge to place the defendant’s property in receivership. Frankel v. Frankel, 212 Ga. 643, 94 S.E.2d 728, 1956 Ga. LEXIS 478 (1956). Receivership improper if defendant offers bond to assure value of assets. - Where a suit is brought in equity for appointment of a receiver to preserve assets of defendant, the mere fact that certain funds belonging to the defendants were under lien of garnishment, that the hotel building was exposed by broken windows and other damage by the fire, and that there were a number of suits pending because of injuries to guests, did not, in view of the owner’s written offer to protect and preserve all the property and give bond to insure its fulfillment, authorize the appointment of a receiver. Irwin v. Willis, 202 Ga. 463, 43 S.E.2d 691, 1947 Ga. LEXIS 479 (1947). Receiver properly appointed after dissolution of limited liability company sought. - After proceedings for dissolution of a limited liability company (LLC) were brought under O.C.G.A. § 1411-603, the trial court properly appointed a neutral receiver to manage the affairs of the LLC during the pendency of further proceedings. The parties, who each owned half shares in the LLC, could not agree about the management of the LLC and its financial affairs, and even when accountants were hired to conduct an audit of the LLC, a meaningful accounting could not be done because the parties provided conflicting, incomplete, and inconsistent information to the accountants. Ga. Rehab. Ctr., Inc. v. Newnan Hosp., 283 Ga. 335,

658 S.E.2d 737, 2008 Ga. LEXIS 256 (2008). No transcript meant court assumed receiver proper. - In a case involving the appointment of a receiver to sell certain real property owned by a property owner in order to satisfy a judgment a

creditor obtained against the property owner, the state supreme court had to assume, in the absence of a transcript, that there was sufficient competent evidence to support the trial court’s findings. Popham v. Yancey, 284 Ga. 467, 667 S.E.2d 353, 2008 Ga. LEXIS 744 (2008).

RESEARCH REFERENCES Am. Jur. 2d. 66 Am. Jur. 2d, Receivers, § 11 et seq.

C.J.S. 75 C.J.S., Receivers, § 16 et seq.