Mediation is an efficient, cost effective method to resolve disputes between two parties, and in the presence of a receiver, two parties can better control the outcome of their dispute. Member Howard M. Ehrenberg and Associate Claire K. Wu authored an article in Receivership News outlining a receiver’s right or power to use mediation under Section 568 of the California Code of Civil Procedure.
Although a receiver is given broad authority under Section 568 to compromise disputes, there is no explicit right of a receiver to “sign off” on a resolution through mediation without a court’s authority. Howard and Claire write, “An unauthorized agreement of a receiver does not bind the court in charge of the receivership, is not recognized as a contract of the receivership, and is treated as the receiver’s own contract.”
Howard and Claire conclude that the best practice in seeking court approval is to “include in the order of appointment the right to, in the receiver’s discretion, use a mediator and enter into an agreement, subject to further court approval, binding the property in dispute and the court in charge of the receivership.” Without such an agreement, a receiver may petition for more authority if the need arises.
Read the full article here.