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April 2023

Gordon & Rees Phoenix Team Secures Motion to Dismiss Challenge to Receiver’s Sale

Gordon Rees Scully Mansukhani Phoenix Managing Partner Leon Silver and Associate Steven Crocchi prevailed on a motion to dismiss on behalf of a court-appointed receiver in a hotly contested dispute involving ownership of property in a golf club development.

The receiver was appointed by the United States District Court, District of Arizona to liquidate and sell various properties held by a defendant who pleaded guilty to various criminal offenses. The receiver sold a one-half interest in one such property to a limited liability company. Five years later, that LLC executed a letter of intent to sell that one-half interest in the property to the plaintiffs. That deal eventually fell through, and the plaintiffs sued numerous people that had some connection to that property, including the receiver.  

As to the receiver, the plaintiffs alleged that he made misrepresentations to the district court that caused the district court to approve the sale of the property to the LLC at a discounted rate. The plaintiffs also alleged that the receiver failed to take control over the Homeowner’s Association, a responsibility that the plaintiffs alleged was part of his role as a receiver.

The Gordon & Rees team moved to dismiss the complaint, arguing that the receiver was immune from suit as a court-appointed receiver and that the plaintiffs failed to ask the district court for permission to sue the receiver before suit was filed. The court agreed and dismissed the claims against the receiver.