2020 Update: Up to and including a $100,000 surety bond requirement, our agency offers you the North Carolina receiver bond without a credit inquiry. Please call us for more details. Amounts greater than $100,000 will undergo a standard underwriter review --- which includes a credit check. Good credit is typically required in order to obtain approval for these higher amounts.
A receiver is an individual or entity, approved and appointed by a court, who is mandated to maintain control over and manage a financial entity which is being liquidated or is in some financial distress.
Receivers may be charged with the acceptance of rents, disbursements of payments and other forms of monetary transactions on behalf of a corporation or person who is in a litigant in a court or bankruptcy proceeding.
In North Carolina, receivers are regulated by Article 38 of the state’s statutes.
In North Carolina, receivers may in addition to taking payments and rents, foreclose on deeds of trust, sue, appoint persons, and in general, engage in all activities which would cover the ambit of a corporation in its day-to-day operations.
If a North Carolina court has mandated you (or for legal counsel, your client) to obtain a receiver bond, the bond is required as financial protection for the adverse party.
More specifically, it is required in the event that the case is subsequently vacated in the favor of the adverse litigant.
If this occurs, the bond’s amount should be sufficient to cover any attorney fees and other financial losses incurred by the other party.
Essentially, the bond is a financial guarantee that a receiver will only act within the best interest of the purpose of the bond and follow all laws and court orders in doing so.
Failure to abide by any court provisions or laws may cause a claim to be filed against the bond.
Ultimately, the amount of a North Carolina court receiver bond will be decided by the court presiding over the case.
As far as underwriting your client or your receiver bond is concerned, our agency will need copies of all court orders.
According to § 1-503, in instances where there is danger of loss of property or “...imminent danger of insolvency...”, the amount of receiver bond required may be twice what is being asked by the plaintiff.
In addition to the amount of the receiver bond (typically backed by full collateral, or its financial equivalent, as in a “letter of credit”) there is an annual premium for the bond’s issuance. There also may be instances where collateral is not required, particularly if you can demonstrate a certain net worth or assets.
The annual premium is about 1-3% of the bond’s face amount. As the bond amounts go substantially highers, the premium required is reduced as a percentage.
The bond premium will renew annually for as long as the case is being litigated or the court requires surety.
AmeriPro Surety Bonds is a nationwide, surety bonds-only agency. We will work with you to get the receiver bond --- and any bond you need --- filed in a timely manner with the court.
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