Executors and administrators have responsibilities similar to those of a trustee. Therefore, the same coverage rules apply to executors, administrators, and trustees. For information on the coverage status of trustees, see RS 02101.600F.

Usually, a receiver liquidates and closes a business, or operates a business temporarily. Federal and state statutes determine how to appoint receivers. There are two types of receivers:

1. 1. 

   General receivers possess and control all (or substantially all) of someone’s property, and

2. 2. 

   Custodial receivers take charge of limited or specific property, and may not have the authority to liquidate property.

A federal or state statute may provide that creditors of a corporation that is insolvent, or in danger of becoming insolvent, may apply to a court for appointment of a receiver. These receivers are known as court receivers. If the court of equity appoints the receiver, they are also referred to as an equity receiver.

The following are the court receiver’s duties:

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  perform their services under the general jurisdiction and direction of the court;

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  powers are usually limited to those the court grants in the appointment order or in later orders;

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  the court determines the pay;

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  do not take title to the property, but merely possess and control the property for the court;

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  manage the property on behalf of the parties that are ultimately entitled to it; and

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  sometimes regarded as trustees for those persons to whom he or she stands in a fiduciary relationship.

Some state statutes allow a corporation to appoint its own receiver when the corporation wishes to dissolve itself. In cases of bank corporations, a State Department, with general jurisdiction over state banks, may appoint a receiver for the bank. Sometimes a court must confirm the appointment. These appointed receivers are known as statutory receivers.

A statutory receiver derives powers and authority from the statute that appoints him or her. The appointing body determines the salary. The state statute may also provide that the receiver take title to the property. It may further provide that creditors may remove a receiver, and demand the court to appoint a receiver they choose.

The usual common-law rules apply in determining the coverage status of receivers. Cases may arise where there is sufficient control over the receiver’s services, exercised or reserved, either in the court or the property owner to make the receiver an employee. Because the receiver acts in a fiduciary capacity, we usually do not find an employer-employee relationship between a receiver and the property owner(s), or the court. For information on receivers whose services may constitute a trade or business, see RS 01802.033.

To determine the coverage status of a receiver:

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  find out how he or she was appointed and the purpose of the receivership;

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  obtain copies of the order of appointment or other appointment papers; and

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  determine who establishes the trustee’s pay rate.

For cases involving corporations, determine the state law regarding the effect of the receivership on the existence of the corporation. If the status of a statutory receiver is in question, find out the provisions of the state or federal law on the powers of the receiver and creditors. Where such questions arise, refer them to the regional attorney in accordance with usual procedures.

Some state statutes appoint a liquidator when a corporation voluntarily dissolves. The statutes also provide the powers and duties of a liquidator. A liquidator is similar to a statutory receiver. Therefore, the instructions on statutory receivers apply to liquidators.