Receivership is one of the most powerful—and least understood—tools available in Texas civil litigation. When money is disappearing, property is being mismanaged, or a business is being run into the ground during a dispute, a Texas court can step in and appoint a receiverto take control.
This post explains when a Texas court can appoint a receiver, what a receiver can do, and why receivership is often a last-resort but decisive remedy.
What Is a Receiver Under Texas Law?
A receiver is a neutral third party appointed by the court to take possession, custody, or control of property or a businesswhile a lawsuit is pending—or after judgment—when ordinary legal remedies are inadequate.
Receivership is not automatic. Texas courts view it as an extraordinary equitable remedy, used only when necessary to preserve assets or prevent irreparable harm.
Statutory Authority for Receivership in Texas
Texas receivership authority is codified primarily in Chapter 64 of the Texas Civil Practice & Remedies Code.
General Authority
“A court of competent jurisdiction may appoint a receiver in any case in which receivers have heretofore been appointed by the usages of courts of equity.”
Tex. Civ. Prac. & Rem. Code § 64.001(a)
This language intentionally incorporates historic equity principles, giving courts broad—but cautious—discretion.
Common Grounds for Appointing a Receiver
Texas law provides specific scenarios where receivership is authorized.
1. Property Is in Danger of Being Lost or Wasted
A receiver may be appointed “if a party demonstrates an interest in real or personal property… and that the property or its revenue is in danger of being lost, removed, or materially injured.”
Tex. Civ. Prac. & Rem. Code § 64.001(a)(1)
This commonly arises in:
- Partnership disputes
- Family-owned business litigation
- Real estate ownership conflicts
- Divorce cases involving closely held businesses
2. Fraudulent Conduct or Mismanagement
Courts frequently appoint receivers where:
- Funds are being diverted
- Records are concealed
- Assets are transferred to insiders
- A controlling party refuses transparency
Receivership is especially effective when injunctions alone are insufficient.
3. Post-Judgment Enforcement
A receiver may be appointed “to collect or preserve property of a judgment debtor.”
Tex. Civ. Prac. & Rem. Code § 64.001(a)(3)
This is powerful when:
- A debtor ignores a judgment
- Assets are held in shell entities
- Garnishment and turnover orders have failed
Receivership allows the court to step directly into control of assets.
Receivership in Business Disputes
Receivers are frequently appointed to:
- Operate businesses during shareholder disputes
- Manage LLCs with deadlocked members
- Secure books, records, and bank accounts
- Prevent insiders from self-dealing
Importantly, courts prefer narrow receiverships—limited in scope and duration—to avoid unnecessary disruption.
What Powers Does a Receiver Have?
A receiver’s authority is defined by the court order but often includes:
- Taking possession of bank accounts
- Managing or selling property
- Operating a business
- Collecting rents or revenues
- Hiring professionals (accountants, property managers)
All actions are subject to court oversight.
Receivership Is Not Automatic
Texas courts repeatedly emphasize that:
- Receivership is disfavored
- Less intrusive remedies must be considered first
- The applicant must show imminent harm and no adequate legal remedy
That high bar is exactly why receivership is so effective when granted.
Why Receivership Matters in Real-World Litigation
Receivership changes leverage instantly. Once control is removed from a misbehaving party, litigation often resolves quickly—because the incentive to delay or obstruct disappears.
In disputes involving real estate, business ownership, judgment enforcement, or marital estates, receivership can be the difference between paper victories and real recovery.
Final Thoughts
Receivership is one of Texas courts’ most powerful equitable tools—but it must be handled carefully and strategically. When assets are at risk, timing and evidence matter.
If you’re involved in a dispute where property, funds, or a business are being misused or hidden, understanding receivership under Texas law is critical.
At David C. Barsalou, Attorney at Law, PLLC, we help clients navigate business, family, tax, estate planning, and real estate matters ranging from document drafting to litigation with clarity and confidence. If you’d like guidance on your situation, schedule a consultation today. Call us at (713) 397-4678, email barsalou.law@gmail.com, or reach us through our Contact Page. We’re here to help you take the next step.
