When a judgment has become uncollectible because of the nature of the assets or business of the judgment debtor, a receiver should be considered. Ordinarily a receiver is appointed because all other methods to collect the judgment have proven fruitless, or would be fruitless if undertaken. The creation of a receivership to enforce a judgment should be a remedy of last recourse.
Circumstances under which a receivership is created to assist in the enforcement of a judgment often include:
- Ownership of a liquor license by the judgment debtor. Liquor licenses are not subject to levy and execution. However, a receiver may be appointed to sell or liquidate the entire business, including the liquor license. The proceeds from the sale of the liquor license are then distributed first to taxing authorities (if taxes are owed) and then to the holder of the judgment lien until the judgment lien is paid.
- There is a valid concern that enforcement of the judgment cannot occur before the judgment debtor has received certain assets and disposed of them by placing them outside the jurisdiction of the court which issued the judgment.
- The business is a cash-based business and the only method by which the cash may be collected is by placing the entire business under the jurisdiction of the Court, through the appointment of a receiver. An example of this kind of businesses is a taxi company.