Delaware Court-Appointed Receiver and Custodian Services
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Delaware Court-Appointed Receiver and Custodian Services
EDS Delaware Court-Appointed Receiver and Custodian Services are independent third-party neutral fiduciaries appointed by a court to take control of and manage a business or property that is involved in a legal dispute. The appointment of a Delaware Court-Appointed Receiver or Custodian is typically done to protect the assets of the business or property while the legal dispute is being resolved. The Receiver or Custodian has the authority to operate and manage the business or property, and can also take steps to protect and preserve the assets until the dispute is resolved.
In practical terms, a Delaware Court-Appointed Receiver or Custodian functions as an officer or agent of the Court, with a fiduciary duty to the Court and all parties involved in the litigation, to preserve, protect, manage, operate, and otherwise handle the disposition of troubled assets while maintaining clear, objective oversight during legal proceedings.
For over 40 years in hundreds of assignments across industries and asset classes throughout the country, EDS has skillfully and judiciously served as Court-Appointed Receiver and Custodian for creditors, attorneys, investors, and all stakeholders to preserve, protect, manage, operate, and otherwise handle the disposition of troubled assets, real and movable, tangible and intangible, in business disputes, commercial foreclosures, probate, divorce, bankruptcies, and myriad other legal proceedings.
For a broader fiduciary context, see our Court-Appointed Receiver Services and Receivership Services pages.
National Recognition, Government Engagements, and Operational Reach
Delaware Receivership and Custodianship Framework
Delaware Court-Appointed Receiver and Custodian Services
Protecting and Maximizing Value For All Stakeholders
- 8 Del. C. § 226, Appointment of custodian or receiver of corporation on deadlock or for other cause
- 8 Del. C. § 291, Receivers for insolvent corporations; appointment and powers
- 8 Del. C. § 279, Trustees or receivers for dissolved corporations; appointment; powers; duties
- 6 Del. C. § 18-805, Trustees or receivers for limited liability companies; appointment; powers; duties
Under Delaware law, the Court of Chancery may appoint a custodian, and if the corporation is insolvent, a receiver, in specified deadlock and abandonment circumstances under 8 Del. C. § 226. Delaware law also provides for receivers for insolvent corporations under 8 Del. C. § 291, for dissolved corporations under 8 Del. C. § 279, and for dissolved limited liability companies under 6 Del. C. § 18-805.
For over 40 years in hundreds of assignments across industries and asset classes throughout the nation, EDS, with its principal office in the Greater New Orleans area, Slidell, Louisiana, has skillfully and judiciously served as Court-Appointed Receiver and Custodian for creditors, attorneys, investors, and all stakeholders to preserve, protect, manage, operate, and otherwise handle the disposition of real and movable, tangible and intangible, assets in commercial foreclosures, bankruptcies, and myriad other legal proceedings.
Our capabilities, decades of state and federal Court-Appointed Receiver and Custodian experience, and unimpeachable credibility afford EDS an unparalleled opportunity to serve as a trusted Delaware Court-Appointed Receiver, Trustee, Custodian, Special Master, Special Magistrate, Liquidator, or in other such court-appointed fiduciary capacities.
For related insolvency remedy work, see our Delaware Assignment for the Benefit of Creditors Services.
Judicial and Fiduciary Context
A Delaware Court-Appointed Receiver or Custodian is a court-appointed agent responsible for acting on behalf of the court and managing the property, real and movable assets, and financialsunder the court’s direction in a manner that is best for all parties involved until the final resolution of the legal dispute.
EDS Delaware Court-Appointed Receiver and Custodian Services specialists are highly trained, highly skilled, highly credentialed, and highly experienced distressed assets, turnaround management, valuation, and disposition experts with decades of proven experience and unimpeachable credibility who master the facts and present clear, objective, and compelling findings to judges.
EDS Court-Appointed Receivers and Custodians are officers or agents of the Court with a fiduciary duty to the Court and all parties involved in the litigation to preserve, protect, manage, and operate the business or property, real and movable, collect all receipts and pay all necessary bills associated with the business or property, including those related to insurance, utilities, and rents, and provide periodic or court-ordered accountings to the court and all interested parties. The Court may also allow the Receiver to make necessary improvements to the property as well as market it for sale or lease.
Operational Responsibilities
The role of a Delaware Court-Appointed Receiver or Custodian can vary depending on the specific circumstances of the case, but they are generally responsible for managing the day-to-day operations of the business or property and ensuring that it is being run in a financially responsible manner. They may also be required to provide regular reports to the court on the condition of the business or property and any actions taken to protect and preserve the assets.
EDS Delaware Court-Appointed Receivers and Custodians marshal onsite 24/7/365 throughout the nation to secure, preserve, protect, operate, maintain, and enhance the going-concern value of the businesses and business assets that might otherwise be lost during legal proceedings while actively pursuing permanent solutions.
The Court may also allow the Receiver or Custodian to make necessary improvements to the property as well as market it for sale and/or lease. Where appropriate, these matters may also overlap with broader court-appointed receivership services and related distressed asset management assignments.
Common Situations Where Receiverships and Custodianships Are Utilized
Receiverships and Custodianships are commonly utilized in matters involving:
- Corporate deadlock
- Distressed loan collateral enforcement
- Business divorce or shareholder disputes
- Insolvent corporations
- Dissolved corporations and dissolved LLCs
- Commercially distressed real estate
- Environmentally impaired properties
- Corporate insolvency and restructuring matters
- Regulatory enforcement actions
- Special assets and special situations
In Delaware, the statutory framework expressly addresses custodian or receiver appointments in corporate deadlock and abandonment matters, insolvent corporations, dissolved corporations, and dissolved limited liability companies.
The impact of complex and contentious litigation in many distressed situations can complicate, if not destroy, stakeholders’ positions if not appropriately handled. Distressed and troubled accounts present many pressing challenges.
Strategic Considerations in Distressed Asset Environments
When problematic accounts face operational or financial difficulties, our experienced, street-savvy, and proficient crisis/interim/turnaround and workout management teams employ creative solutions that often immediately reverse and resolve these situations.
We specialize in providing 24/7/365 on-site crisis interim management teams to operate troubled accounts facing operational and financial difficulties. We are particularly skilled in providing transitional management in highly contentious special assets and special situations and in handling all efforts related to the wind-down and disposition of environmentally sensitive and Impaired Real and Movable Property, including Superfund and Brownfields Sites, Hospitality, Gaming, Resorts, HOA-Golfing Communities, Shipyards/Admiralty/Maritime, Aviation (Fixed and Rotor), Automotive (Manufacturing and Retail), Heavy Industrial, Oil & Gas/Minerals, Commercial (Class 1,2, 3 and Office Towers), Multifamily, and High-Value Residential Real Estate.
Professional Receivership and Custodianship Engagements
EDS has served in complex court-appointed and fiduciary roles involving:
- State and federal court receiverships
- Court-appointed keeper assignments
- Commercial foreclosures
- Bankruptcies
- Distressed real estate and business assets
- Multistate and multinational corporate disputes
- Environmentally impaired industrial assets
- Asset recovery and liquidation assignments
- Municipal receivership services
- Special assets and special situations
- Aviation and admiralty-related federal seizure matters
EDS’s unparalleled level of expertise is recognized and appreciated in boardrooms and courtrooms throughout the world.
Court-Appointed Fiduciary Experience
EDS serves nationwide in multistate Delaware Court-Appointed Receiver and Custodian matters of varying size, complexity, and operational demands.
EDS is trusted to serve in complex Delaware Receivership and Custodianship matters requiring experienced fiduciary oversight, operational control, and objective reporting.
Our award-winning receivership services have earned us the distinction of being the only Court-Appointed Receiver in the country that the United States Environmental Protection Agency (USEPA) allows to conduct such services on active Superfund Sites.
We are pleased to serve as Court-Appointed Keepers for the U.S. Marshals Service for federal court seizures of assets under aviation and admiralty jurisdiction.
For matters involving financial disputes, valuation issues, or business valuation in litigation, EDS also provides related Litigation Appraisal Services across all valuation disciplines, e.g., Business Valuation, Real Estate, and Personal Property, as well as valuation-related Alternative Dispute Resolution Umpire services.
How may we be of service to you?
— DISCUSS A RECEIVERSHIP MATTER
Delaware Court-Appointed Receiver and Custodian Services
Related EDS Receivership and Fiduciary Services Include:
- Nationwide Receivership and Fiduciary Services
- Nationwide Court-Appointed Receiver Services
- Delaware Court-Appointed Receiver Services
- Florida Court-Appointed Receiver Services
- Texas Court-Appointed Receiver Services
- Louisiana Court-Appointed Receiver / Keeper Services
- Court-Appointed Liquidator Services
- Assignment for the Benefit of Creditors Services
Frequently Asked Questions (FAQ)
What is a Court-Appointed Receiver or Custodian?
A Delaware Court-Appointed Receiver or Custodian is an independent third-party fiduciary appointed by the Delaware Court of Chancery to take charge of property, assets, business affairs, or dissolution-related matters in specified circumstances. Depending on the statute and the facts, Delaware law may authorize the appointment of a custodian, receiver, or trustee. 8 Del. C. § 226, Appointment of custodian or receiver of corporation on deadlock or for other cause, 8 Del. C. § 291, Receivers for insolvent corporations; appointment and powers, 8 Del. C. § 279, Trustees or receivers for dissolved corporations; appointment; powers; duties, 6 Del. C. § 18-805, Trustees or receivers for limited liability companies; appointment; powers; duties
What responsibilities does a receiver or custodian have during litigation?
A Delaware receiver’s or custodian’s responsibilities depend on the court’s order and the governing statute, but commonly include taking charge of assets, collecting debts and property due to the entity, prosecuting and defending claims, preserving value, and reporting to the Court of Chancery as directed. In insolvency matters, Delaware law expressly authorizes a receiver or custodian to take charge of the corporation’s assets, estate, effects, business, and affairs, and to do acts necessary or proper for that purpose.
When will the Delaware Court of Chancery appoint a receiver or custodian?
Under Delaware law, the Court of Chancery may appoint a custodian, and if the corporation is insolvent, a receiver, in specified deadlock or abandonment circumstances under 8 Del. C. § 226. Delaware law also provides for appointment of a receiver for an insolvent corporation under 8 Del. C. § 291, for a trustee or receiver for a dissolved corporation under 8 Del. C. § 279, and for a trustee or receiver for a canceled or dissolved LLC under 6 Del. C. § 18-805.
How is a receiver different from a custodian in Delaware?
In Delaware, a custodian is commonly associated with a solvent corporation experiencing deadlock or abandonment under Section 226, while a receiver is more commonly associated with insolvency or dissolution-related circumstances. The exact distinction depends on the statute invoked and the Court of Chancery’s order, but Delaware’s statutory framework intentionally uses different fiduciary roles depending on the condition of the entity and the relief needed.
What types of matters commonly involve Delaware receiverships?
Delaware receiverships commonly arise in matters involving corporate deadlock, insolvent corporations, dissolved corporations, canceled or dissolved LLCs, shareholder disputes, business divorce disputes, distressed assets, and situations where the Court of Chancery determines that the appointment of a fiduciary is necessary to protect property, preserve value, or complete winding up. Delaware is especially significant for entity disputes because so many corporations and LLCs are organized under Delaware law.
Can a Delaware receiver take control of business assets and pursue claims?
Yes. Delaware law expressly authorizes receivers in certain matters to take charge of the entity’s assets and property, collect outstanding debts and claims, prosecute and defend suits in the name of the entity or otherwise, appoint agents, and perform acts necessary or proper to preserve and administer the estate or complete the winding up process.
Does a Delaware receiver report to the Court of Chancery?
Yes. Delaware law provides that trustees or receivers appointed by the Court of Chancery must file inventories and make reports to the Court as directed. That court-supervised reporting function is part of what makes a receivership a fiduciary remedy rather than ordinary business management.
Are Delaware receiverships limited to insolvent corporations?
No. Delaware receiverships are not limited to insolvent corporations. Delaware law also authorizes a custodian or receiver for certain deadlock or abandonment situations under Section 226, a trustee or receiver for dissolved corporations under Section 279, and a trustee or receiver for canceled LLCs under Section 18-805.
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