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All states have procedures for appointment of a Receiver. Texas law allows judges to appoint a receiver to enforce unpaid judgments and control corporate entities, pursuant to Tex. Civ. Prac. & Rem. Code, chs 31, 64 and Tex. Bus. Organs. Code, ch. 11.

Any Texas court which has issued a judgment can later appoint a Receiver to enforce it. This includes state district courts down to justice of the peace courts. Davis v. West, 317 S.W.3d 301, 309 (Tex. App.—Houston [1st Dist.] 2009, no pet.).

Federal courts may also appoint receivers to enforce their judgments. Federal courts in Texas will apply Texas law for receivers under Fed. R. Civ. P. 69(a).

Under Texas law, the power of a receivership derives from the doctrine of custodia legis. After a turnover order is signed, all of the judgment debtor’s nonexempt property becomes property in custodia legis, or “in the custody of the law.” First Southern Properties, Inc. v. Vallone, 533 S.W.2d 339, 343 (Tex. 1976). Custodia legis occurs immediately upon the appointment of the receiver, even prior to his or her qualifying by filing the bond and oath of office. Cline v. Cline, 323 S.W.2d 276, 282 (Tex. Civ. App. – Houston 1959, writ ref’d, n.r.e.).

The judgment debtor’s property is considered to be in the constructive possession of the court. During the pendency of a receivership, the receiver has exclusive possession and custody of the judgment debtor’s property to which the receivership relates. First S. Props., 533 S.W.2d at 343; Ellis v. Vernon Ice Co. & Water Co., 86 Tex. 109, S.W. 858 (1893). No one, not even a lien holder with a deed of trust, can sell property held in custodia legis by a duly appointed receiver. First S. Props. at 533 S.W.2d at 341; Huffmeyer v. Mann, 49 S.W.3d 554, 560 (Tex. Civ. App. – Corpus Christi, 2001). Any unauthorized transfer of property in the custody of a receiver is not merely voidable, it is void. First S. Props., 533 S.W.2d at 341. Any conveyance of property in the custody of a receiver without approval by the court has no effect upon the receivership and the accomplishment of its purposes. T.H. Neelv. W.L. Fuller, 557 S.W2d 73, 76 (Tex. 1977).

Receivership fees are costs of court. Lost Creek Ventures, LLC v. Pilgrim, No. 01-15- 00375-CV, 2016 Tex. App. LEXIS 6974, at *23 (Tex. App. June 30, 2016, no pet). Generally, receivership fees are paid as a percentage of funds collected, usually 25% in state court, but also on a contingency hourly basis. United States SEC v. Harris, 2016 U.S. Dist. LEXIS 51708 (allocating funds recovered by receiver in bankruptcy case and paying fees).

No bond is required of the receiver. The trial court has already adjudicated the claims and concluded that the debtor owes money on account of his conduct. The risk that the receiver might harm the debtor by seizing property is low. Schultz v. Cadle Company, 825 S.W.2d 151 (Tex. App.-Dallas), writ denied per curium, 852 S.W.2d 499 (Tex. 1993). A bond of $100.00 is typically sufficient.