RULE 4:53. Receivers And Liquidating Trustees

4:53-1. Notice; Dismissal; Appeal

No order appointing a custodial receiver under the general equity power of the court shall be granted without the consent of or notice to the adverse party, unless it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable damage will result to the applicant before notice can be served and a hearing had thereon. Such an order granted without notice shall give the adverse party leave to move for the discharge of the receiver on not more than 2 days' notice; and shall direct a corporation or a partnership for whom a custodial receiver has been appointed to show cause why a receiver should not be appointed under the power conferred by statute. No statutory receiver shall be appointed for a corporation without giving it notice and an opportunity to be heard; and an order appointing a statutory receiver for a corporation shall give the stockholders and creditors of the corporation leave, at a specified time and place, to show cause why the receiver should not be continued. An action in which a receiver of a corporation has been appointed, or applied for shall not be dismissed except by order of the court. An order appointing a statutory or liquidating receiver shall be deemed final for the purposes of appeal.

Note: Source-R.R. 4:68-1; amended July 14, 1992 to be effective September 1, 1992.

4:53-2. Venue

The venue in actions in the Superior Court for the appointment of a receiver of a corporation or partnership shall be laid in the county where the principal place of business of the corporation or partnership is located.

Note: Source-R.R. 4:68-2.

4:53-3. Employment of Attorney or Accountant

A receiver may employ an attorney or accountant only if the court determines that such employment is necessary to the proper conservation and administration of the estate. No order authorizing such employment shall be entered until after a hearing on the fiduciary's sworn application setting forth facts to support the need therefor, except that where necessary to prevent immediate and irreparable damage such employment may be authorized by the court until an application for authorization of such employment can be made pursuant to this rule. Notice of the application together with a copy of affidavit shall be mailed by ordinary mail, not less than 15 days prior to the date for hearing fixed thereon to all creditors or such of them as the court shall direct and, by certified mail, return receipt requested, to the District Director of Internal Revenue for the Internal Revenue District in which the proceedings are commenced, to the United States Attorney for the District of New Jersey, and to the Attorney General for the State of New Jersey. The court shall authorize such employment if satisfied of the necessity of the employment and that the attorney or accountant is not interested in the litigation or in any of the parties thereto in such a way as would disqualify the attorney or accountant from properly serving the receiver as a fiduciary for all the stockholders and unsecured creditors of the estate. On request by an interested party, the court shall require the receiver to be examined under oath on these issues. The employment of more than one attorney may be authorized, but the total fees allowed them shall not be increased because of the number of attorneys employed.

Note: Source-R.R. 4:68-4(a)(b)(c); amended July 13, 1994 to be effective September 1, 1994.

4:53-4. Allowances to Receivers and Attorneys

Note: Source-R.R. 4:68-5(a)(b); paragraph (b) amended July 13, 1994 to be effective September 1, 1994.

4:53-5. Attorney for the Plaintiff

Unless a receiver applies for, and until the receiver obtains leave to employ, an attorney, the plaintiff's attorney may proceed with the conduct of the cause, but shall not be allowed by the court any compensation for services rendered after the appointment of the receiver unless thereafter appointed the receiver's attorney by the court.

Note: Source-R.R. 4:68-6; amended July 13, 1994 to be effective September 1, 1994.

4:53-6. Partnership Receivers and Liquidating Trustees

Receivers appointed or directed to wind up the affairs of a partnership or pay its debts, and trustees in liquidation of trust estates, shall give notice of their appointment and notice to creditors to present their claims; and unless otherwise ordered by the court, the notices shall be similar to the notices required to be given by assignees by N.J.S. 2A:19-8 and published and mailed in the same manner. Except as otherwise ordered by the court, the receiver or trustee shall, at the expiration of 3 months from the time of appointment, file a list of the claims presented and proved; and the receiver or trustee, or any creditor or other person interested, may except to the allowance of the whole or any part of any claim presented, of which exception notice shall be given to the claimant, and thereupon such order shall be taken for adjudication upon the claim as the court directs. Unless otherwise directed by the court, this rule does not apply to receivers directed to continue a partnership business.

Note: Source-R.R. 4:68-7; amended July 13, 1994 to be effective September 1, 1994.

4:53-7. Inventory and Account; Audit

Note: Source -- R.R. 4:68-8(a)(b)(c)(d)(e); paragraph (b) amended July 15, 1982 to be effective September 13, 1982; paragraphs (a), (b) and (c) amended July 13, 1994 to be effective September 1, 1994; paragraphs (a) and (b) amended June 28, 1996 to be effective September 1, 1996; paragraph (a) amended July 28, 2004 to be effective September 1, 2004.

4:53-8. Accounting Upon Liquidation of a Financial Institution

Upon accounting proceedings in connection with the liquidation of a financial institution, service may be made pursuant to R. 4:56-2 (action to approve a plan of reorganization of a bank) upon the class representative in the action.

Note: Source-R.R. 4:68-9.

4:53-9. Destruction of Records

When an order is entered discharging a permanent or temporary custodial or statutory receiver or trustee, or thereafter, the court may authorize all of the books, records and papers of the corporation or partnership for which such receiver or trustee acted, and all financial papers and records in the hands of the trustee or receiver relating to the administration to be destroyed on or after a date to be fixed in such order. If the need appears, the court may require, as a condition of such destruction, that microfilm copies of said documents be prepared before the documents may be destroyed. No destruction shall be authorized, however, unless it appears that notice of the application has been given to all parties in interest, to the Commissioner of Internal Revenue of the United States and to the Division of Taxation, Department of the Treasury.