Simon PLC Attorneys & Counselors – September 2026 Memorandum

RECEIVERSHIP JURISDICTION AND ANCILLARY COMMERCIAL RECEIVERS

Troy, MI. Receivership is a well-recognized tool utilized by trial courts to assume control over assets in dispute and subject to judgment. A receiver is a person appointed by a court to take possession of property and to manage or dispose of that property and any income the property produces. The receiver’s job is to maintain neutrality and ensure the property’s maximum value is recovered and then, pursuant to direction of the court, distribute assets to parties entitled to recover. Often, but not always, such assets are in a single jurisdiction within the confines of a single state’s boundaries. Receivership in such an instance is a straightforward proposition wherein the Receiver may act as an arm of the Court within the jurisdiction of the Court to manage those assets.

However, when assets cross state lines then additional steps must be taken. In 1854 in Booth v Clark, the United States Supreme Court addressed the limitations of a receiver’s authority across different state lines within the United States. The case involved an appointed New York receiver named William A. Booth and his efforts to assert claims against Mexican claim funds awarded to Ferdinand Clark by U.S. commissioners in the District of Columbia. The pivotal issue resolved by the Supreme Court was that Booth, as a receiver appointed under New York law, lacked the jurisdiction to enforce his New York court appointed authority over a fund awarded to Clark in D.C.

In the ensuing 172 years the law has evolved to answer the question of whether a receiver in one state might in some circumstances have authority to act in another. Such analysis requires application and assessment of the appointment of an ancillary receiver and for purposes of this article is framed in the context of receivership over a commercial business entity, only.

Federal Court Receivership.

As a preliminary matter, this question is no longer a concern in federal court. Traditional federal equity practice gave the court’s receiver the jurisdiction over only the debtor’s property located in the specific district court’s geographical boundaries, necessitating the need for ancillary receivers in other courts where the debtor held property. (See Booth, supra). In a receivership, a federal court would exercise “quasi-in rem” jurisdiction over the corporate debtor and its property. (See Penn Gen. Cas. Co. v. Pennsylvania ex rel. Schnader, 294 U.S. 189, 195 (1935) Shaffer v. Heitner, 433 U.S. 186, 199 (1977)). By doing so, the court obtained exclusive jurisdiction over the debtor’s “res” (real property) and sole authority to determine who should possess it. (See Wabash R.R. Co. v. Adelbert Coll. of W. Rsrv. Univ., 208 U.S. 38, 5455 (1908)). In 1948 the United States Congress eventually did away with this rule and settled the matter once and for all by enacting legislation giving receivers “complete jurisdiction and control of all” the debtor’s property, including property “situated in different districts[.]” 28 U.S.C. § 754. Notably, the statute runs a very tight clock on a receiver expanding their jurisdiction. 28 U.S.C. § 754 continues, that “[s]uch receiver shall, within ten days after the entry of his order of appointment, file copies of the complaint and such order of appointment in the district court for each district in which property is located. The failure to file such copies in any district shall divest the receiver of jurisdiction and control over all such property in that district.” Some federal courts have allowed an escape procedure to time barred creditors allowing them to seek “reappointment” of the Receiver from the original court to restart the clock when assets are identified outside of the jurisdiction as well as outside of the ten-day clock.

State Court Receivership in UCRERA states.

As of August 2026, there are fifteen (15) states and the District of Columbia which have adopted the Uniform Commercial Real Estate Receivership Act (the “UCRERA”) [Alabama, Arizona, Connecticut, D.C., Florida, Illinois, Maryland, Michigan, Nevada, North Carolina, North Dakota, Oregon, Rhode Island, Tennessee, Utah and West Virginia]. UCRERA states as its goal the intention to provide uniformity in receivership procedures between states. Adoption of UCRERA is designed to provide certainty for owners and creditors as they petition courts for a receiver’s appointment. That certainty is designed to promote fairness in procedure, bonding and notice, and ultimately maximize value. States having adopted UCRERA limit the uncertainty, time and expense that parties may encounter in wondering as to how the court might respond to a creditor’s motion invoking a receivership proceeding.

Advocating for these goals, the Uniform Law Commission saw fit to include draft language in Section 24 addressing the issue of cross-state jurisdiction:

In a practical sense, courts, creditors and receivers benefit from UCRERA in two (2) ways. Receivers appointed in UCRERA states who are seeking control of assets in other UCRERA states will find comprehensive uniform rules allowing their authority, or that of their designees, that should be seamless. Similarly, receivers appointed in non-UCRERA states seeking ancillary authority in a UCRERA state will find a statutory framework allowing and simplifying the process. Additionally, even federal court receivers seeking ancillary jurisdiction in UCRERA states may find relief to the 10-day rule by means of state law pursuant to the Erie Doctrine requiring federal courts exercising diversity jurisdiction to apply state substantive law and federal procedural law.

Non UCRERA Receivers in Non UCRERA states.

In its 2011 prefatory notes for UCRERA, before any enactment, the Uniform Law Commission advised that only a few states provided a moderate amount of statutory guidance for receivership (California, Indiana, Nebraska, New Mexico, Ohio, Oklahoma and South Dakota) and only two states, Washington and Minnesota, had comprehensive statutes. A review of these statutes brings forth identifiable similarities and background that ultimately led to the draft UCRERA provisions:

Washington’s statute provides:

Minnesota’s statute provides:

In summary, a receiver acting in one jurisdiction who discovers assets of the receivership estate in another jurisdiction will likely find a remedy in the other jurisdiction by going to the state where the business or assets are located and commencing an action to have an ancillary receiver appointed. The success of the remedy may range on the low end based upon comity between the states, the flexibility of the particular judge, and then next to local statutory schemes, and ultimately, in the best-case scenario, a UCRERA enacted state.

N.B. Not Legal Advice: Please contact us if you would like to discuss the facts and circumstances of your specific matter. Simon PLC Attorneys & Counselors expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this memorandum. The information contained herein may not reflect current legal developments and is provided without any knowledge as to the recipient’s location, industry, identity or specific circumstances. No recipients of this content, clients or otherwise, should act, or refrain from acting, on the basis of any content included in this memorandum without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the jurisdiction for which the recipient’s legal issue(s) involve. The application and impact of relevant laws varies from jurisdiction to jurisdiction, and our attorneys do not seek to practice law in states, territories and foreign countries where they are not properly authorized to do so.