Tuesday, March 19, 2019
City of Sierra Madre v. SunTrust Mortgage
Cal.App. 2nd Dist. (B284550) 2/26/19
The court held that the trial court properly authorized a receiver to borrow $250,000 in exchange for a receiver's certificate in the amount of the loan with first priority ahead of all other encumbrances. Courts have substantial discretion to authorize a receiver to borrow money to fund the preservation and management of property in the receivership estate. In that circumstance, the receiver may ask the court to authorize the issuance of a receiver's certificate to the lender as security for money loaned to the estate. Typically, such a receivership certificate will have priority over all other liens, even preexisting liens where it is equitable to do so.