Court Bonds

What is Receivership and What Is It For?


Receivership can best be defined as a process where someone legally appointed as receiver for a company acts in that capacity as a custodian for the company’s assets or operations. Receivership is most commonly associated with bankruptcies, as receiverships allow businesses to restructure and avoid liquidation by having the court appointed receiver oversee operations.

In most cases, the appointed receiver, who can be appointed by a court, governing body, or creditor, has full discretion in making decisions for the company they are acting as a receiver for. They have authority over operations and properties while having discretion to perform actions such as stopping dividend payment to shareholders. Previous company management may stay in place, but their authority is obviously limited by the receiver.

The receiver’s ultimate goal is to restore the company to recovery. With receivers’ decision-making powers, they can restructure as they see fit, liquidate assets, and manage assets, while protecting the threatened assets of the company.

The main alternative to receivership is liquidation, where all company assets are sold. Receivership acts as a stay on liquidation, as it gives the company a chance to return to profitability with the aid of the receiver. Some receivers just act in that capacity until a new buyer can be found for the business. Learn more about receivership and what it’s for.

When the court appoints a receiver, however, they may require the receiver to purchase a receiver surety bond to secure the receiver’s obligations and make sure they are performed according to applicable state law.

But where can you easily purchase a receiver surety bond?

Colonial Surety offers the direct and digital way to obtain receiver surety bonds. We are the insurance company — which means no agent, no broker, and no middleman. We make it easy to obtain your court bond instantly. The steps are easy — get a quote online, fill out your information, satisfy underwriting requirements, and enter your payment method. Print or e-file your bond from your office. It’s that simple!