United States Process
Several regulatory entities have been granted power by the Congress to place banking and financial institutions into receivership like the Office of the Comptroller of the Currency for failing nationally chartered commercial banks; the Office of Thrift Supervision for failing savings and loan associations (thrift institutions); and the Federal Housing Finance Agency (FHFA) for government-sponsored enterprises (GSEs) such as Fannie Mae, Freddie Mac, and the 12 Federal Home Loan Banks. Most individual states also have granted receivership authority to their own bank regulatory agencies and insurance regulators.
The California Receivers Forum is a non-profit organization formed by interested receivers, attorneys, accountants and property managers, with support from the Los Angeles Superior Court, to address the needs and concerns of receivers, to facilitate communication between the receivership community and the courts, and to assist in raising the level of professionalism of receivers throughout the state. The California Receivers Forum has five local affiliates: Bay Area, Central California, LA/Orange County, Sacramento Valley and San Diego.
Court-appointed receivers are "the most powerful and independent of the judicially appointed managers." Unlike special masters and monitors, "the receiver completely displaces the defendants: the receiver makes large and small decisions, spends the organization’s funds, and controls hiring and firing determinations." Examples of court-appointed receivers include:
- In the District of Columbia, the jail’s medical care facility "was placed under court-ordered receivership in August 1995, after the District was held in contempt for repeatedly failing to implement court orders... intended to ensure adequate medical services to jail inmates." The receivership ended in September 2000.
- An insolvent fuel company is managed by a court-appointed receiver.
- A U.S. District Judge appointed a receiver for the multi-level marketing company Equinox International in August 1999. As of 2007, the receiver was authorized to distribute settlement funds from the now-defunct company to approved claimants.
- After placing the California state prison health care system into receivership in June 2005, a U.S. District Judge appointed a receiver for it in February 2006. California Prison Health Care Services (under control of the California Prison Health Care Receivership) attempts "to bring medical care in California prisons up to constitutional standards."
- In February 2007, a judge in Florida appointed a receiver for companies owned by Lou Pearlman that defrauded investors. The receiver later said about the companies "I don't see much in the way of hard assets that are worth anything or are not already fully encumbered ."
Read more about this topic: Receivership
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