T To the Victor By Shawn M. Grady
Belong the Spoils? Turnover Receivership as a PostJudgment Remedy
o the victor belong the spoils, so the saying goes. Though under Texas civil law system, that is not always the case. In many cases, if a litigant is forced to take a case to judgment, the battle may be won, but the war to recover assets has just begun. Texas is a notorious “debtor haven” and has been since before its birth as a state.1 Texas has a number of statutes that effectively protect debtors, and there remains a judicial culture that sympathizes with debtors. A prudent litigant should obtain collection advice well before judgment. Depending on the situation, claimants may be able to lock down an adversary’s assets through pre-judgment remedies and attach real property or freeze bank accounts. In addition, claimants can conduct discovery in the case-in-chief useful to collection, such as banking habits, the identity of key vendors, lenders, accountants, etc. However, in some cases, it is simply not possible to lock down assets or obtain valuable financial information pre-judgment — and the chase for assets begins post-judgment. Immediately upon obtaining a judgment, there are several post-judgment remedies available to the judgment creditor, including garnishment of bank accounts, turnover relief, and perhaps the most powerful tool, turnover receivership.2 This article deals solely with turnover receivership. Brief History In 1979, the Texas Legislature enacted a statute, commonly known as the “Turnover Statute,” which is a procedural device intended to help a judgment creditor collect its judgment.3 The Turnover Statute provided creditors with a procedure to collect intangibles, such as accounts receivables and the debtor’s interest in claims, which were easily concealed prior to the enactment of this statute. Among the procedural devices offered by the Turnover Statute, perhaps the most powerful tool was the authority granted to the court to appoint a receiver.
