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Most post-judgment work in New York runs on paper served by a marshal. When paper stops working, because the debtor controls a business that will not distribute, holds property that cannot be auctioned meaningfully, or simply ignores court orders, the statute offers something with a person attached to it. A receiver takes control. The enforcement attorneys at Warner & Scheuerman reach for CPLR 5228 in the cases where levies keep coming back empty, because a court-appointed officer can do things a restraining notice cannot: manage, market, sell, and account.
What is a post-judgment receiver under CPLR 5228?
A receiver appointed under CPLR 5228 is an officer of the court authorized to administer, collect, improve, lease, repair, or sell any real or personal property in which the judgment debtor has an interest, and to apply the proceeds to the judgment.
The receiver is appointed on motion of the judgment creditor, in the court where the judgment was entered, on notice to the judgment debtor and to any other party with an interest in the property. The statute permits appointment before or after a levy, and the receiver’s powers are defined by the order rather than fixed by the statute, which makes the drafting of that order the most consequential part of the exercise.
Multiple creditors may seek receivership over the same property, and the statute contemplates that a single receiver can be extended to serve additional judgments.
When should a creditor ask for a receiver instead of a levy?
When the asset needs to be operated, managed, or marketed rather than simply seized, or when the debtor’s cooperation is required and will not be given voluntarily.
The recurring fact patterns are these.
- The debtor owns a closely held business that generates cash but declares no distributions, leaving a charging order under LLC Law section 607 to sit idle.
- The asset is a cooperative apartment, where board approval requirements make an execution sale nearly unsalable and someone must negotiate with the corporation.
- Rental real estate produces income the debtor collects personally, and a receiver can intercept rents at the tenant level.
- The debtor holds cryptocurrency in self-custody, where no garnishee exists and a receiver can be empowered to take control of wallets and liquidate.
- Assets require preservation, such as a business losing value while the debtor mismanages it.
CPLR 5228 is also available where the debtor has been evasive across multiple enforcement attempts, since a receiver’s appointment converts the creditor’s problem into a court officer’s mandate.
What does a court consider before appointing one?
Courts treat receivership as a discretionary remedy and generally weigh whether other enforcement devices would be adequate, the value of the property in relation to the cost of a receivership, and the risk of loss or waste if no receiver is appointed.
A motion that recites frustration will not carry it. A motion that documents a returned income execution, an empty bank levy, an unanswered information subpoena, and a business continuing to operate profitably usually will. The record matters more than the rhetoric, and post-judgment discovery under CPLR 5223 and 5224 is what builds it.
Courts also want to know who the receiver will be, what specific powers are sought, and how the receivership will be funded.
What does a receivership cost?
The judgment creditor typically funds it, at least initially, and recovers from the proceeds. CPLR 8004 governs receiver commissions and sets a ceiling of five percent of the sums received and disbursed, with a court-fixed minimum where the receipts are small.
Additional costs include the receiver’s counsel, an undertaking or bond that the court will usually require, and administrative expenses of operating or maintaining the property. Against a modest judgment those costs make no sense. Against a substantial judgment secured by a business or real property with real equity, they frequently do.
The order should address compensation and funding explicitly, because a receivership that runs out of money mid-course helps nobody.
How does the Warner & Scheuerman approach draft the receivership order?
By specifying powers with the target asset in mind, since a receiver has only the authority the order confers.
For an operating business, that means power to take possession of books and records, access bank accounts, direct payment of receivables, execute documents on the debtor’s behalf, and retain professionals. For real property, power to collect rents, sign leases, make repairs, and market and convey the property. For co-op shares, power to communicate with the board and managing agent and execute transfer documents. For digital assets, power to compel delivery of private keys and to liquidate through a regulated exchange.
The order should also require periodic accountings to the court and set the receivership’s duration, since open-ended appointments invite disputes about scope.
Enforcement of the appointment runs through contempt. A debtor who conceals assets from a receiver or refuses to deliver records faces civil contempt under Judiciary Law sections 753 and 773, with fines measured by the creditor’s loss and, where the ability to comply is clear, the prospect of incarceration.
Receivership is not the first move in a collection file, and it should not be. It is the move for the debtor who has absorbed every other remedy without paying, and its practical effect is often settlement, because the moment a stranger with court authority arrives at the business, the calculus changes. Warner & Scheuerman represents judgment creditors in New York post-judgment enforcement, including CPLR 5228 receivership applications and the discovery record that supports them. Contact the firm through wslaw.nyc to discuss whether a receiver fits your judgment.
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