How To Handle the Cost of Producing Records From a Closed Receivership
How To Handle the Cost of Producing Records From a Closed Receivership

Q: I was involved in a now closed receivership. I want access to some of the records of the entity that was in receivership and some emails and information I believe was sent to the receiver or her counsel. I contacted the former receiver. She said the entity’s records she had have been destroyed and if I want emails or information she or her counsel have, I would have to subpoena them and pay for the cost of locating and producing the items. Is this appropriate?

A: Probably. It depends on what the order approving the receiver’s final account and report, or other orders, state about record retention and production. A receiver is not public storage. Once the case is over, the receiver should not be obligated to keep, maintain or produce records or information obtained from the entity or property in receivership, or generated during the case. At the end of the case, the receiver should ask the court to instruct the receiver concerning disposition of the receivership’s records, both physical and digital. In some cases it may be appropriate to turn them over to the defendant (for example, when the defendant cures a default or settles with the plaintiff). In other cases it may be appropriate to turn them over to the plaintiff (for example, in government enforcement or fraud cases, or in partnership or corporate disputes when the plaintiff is successful). In many cases no party wants the records and it is appropriate for the court to order the receiver to abandon them. In such cases, the receiver needs to determine whether he or she can simply throw them away or whether they need to be shredded or otherwise destroyed. The receiver should also ask the court to authorize the receiver to reserve funds for such purpose or direct one or more of the parties to advance funds for such purpose.

Even if the receiver has destroyed the records obtained from a receivership entity or generated during the case, the receiver and the professionals are likely to have their own records relating to the case, hard copies and/or digital. Once the case is over, and the receiver has been discharged, the former receiver should not have to bear the burden of searching for or producing requested documents or information. It is, therefore, appropriate for the receiver to ask the court to provide, in the order discharging the receiver, that anyone seeking information or documents from the receiver, or the professionals, must pay for the time and cost of production. The Eighth Circuit in United States v. Kelly, 70 F4th 482, 487 ( 8th Cir. 2023) approved a district court order which required requesting parties to pay the costs that would be incurred by the former receiver producing records.

Receivers should consider including the following language in their final account and report orders to cover this issue:
If anyone contacts the receiver, an employee of the receiver, or the receiver’s professionals; or the receiver, his employees, or the receiver’s professionals are served with subpoenas or court orders, that require attendance and/or preparation or production of information and/or documents, for any purpose whatsoever, related to the receivership, the assets or entities in receivership, or the services of the receiver, his employees, or his professionals in this matter, including, but not limited to, discovery, deposition, hearing or trial, the requesting party or entity shall pay, in advance, the estimated fees and costs associated with the requested services and/or production, portal to portal.

This publication is published by the law firm of Ervin Cohen & Jessup LLP. The publication is intended to present an overview of current legal trends; no article should be construed as representing advice on specific, individual legal matters. Articles may be reprinted with permission and acknowledgment. ECJ is a registered service mark of Ervin Cohen & Jessup LLP. All rights reserved.


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