On March 1, 2023, the Pennsylvania Superior Court reversed and remanded a trial court’s ruling that, among other things, denied the appointment of a receiver. SKW-B Acquisitions Seller C, LLC v. Stobba Residential Associates, L.P., et al., Nos. 73 EDA 2022 and 101 EDA 2022, 2023 WL 2293902 (Sup. Ct. Pa. Mar. 1, 2023).*
In relevant part, the Superior Court held that loan documents entitling the lender to request the appointment of a receiver (i.e., that “[u]pon the occurrence of any Event of Default, Borrower agrees that Lender may … apply for the appointment of a receiver, . . .”) did not automatically entitle the lender to the actual appointment of a receiver. Id. at *6. Instead, the Superior Court found that, given the particular loan document language in the case, the trial court retained the discretion to grant or deny the lender’s request for the appointment of a receiver and therefore had to consider common law factors such as whether the borrower: (i) wasted or dissipated assets; or (ii) defaulted on its loan payments. Id.
*The Stobba Residential Associates, L.P. decision is listed as a non-precedential as of this post.