Tex.
Gov't Code Section 4007.151
Receivership
(a)
This section applies only to a person or company acting as a dealer, agent, investment adviser, investment adviser representative, or issuer or as an affiliate of a dealer, agent, investment adviser, investment adviser representative, or issuer, regardless of whether the person or company is required to be registered as provided in this title.(b)
The commissioner may request the attorney general to bring an action as provided by this section for the appointment of a receiver for a person or company to which this section applies or the assets of the person or company if it appears to the commissioner, on complaint or otherwise, that:(1)
the person or company has:(A)
engaged in an act, transaction, practice, or course of business declared as a fraudulent practice under Section 4007.152 (Injunctive Relief) or 4007.153 (Equitable Relief and Restitution); and(B)
acted as a dealer, agent, investment adviser, investment adviser representative, or issuer or as an affiliate of a dealer, agent, investment adviser, investment adviser representative, or issuer in connection with the fraudulent practice; and(2)
the appointment of a receiver for the person or company or the assets of the person or company is necessary to conserve and protect the assets for the benefit of customers, security holders, and other claimants and potential claimants of the person or company.(c)
On the commissioner’s request under Subsection (b), the attorney general may bring an action against a person or company in the name and on behalf of the state if it appears to the attorney general that the facts described by that subsection exist with respect to the person or company. The facts contained in the petition for the appointment of a receiver must be verified by the commissioner on information and belief.(d)
An action under this section may be brought in a district court of any county in which the fraudulent practice that is the subject of the petition was wholly or partly committed or in a county in which any defendant for whom the appointment of a receiver is sought has the defendant’s principal place of business. A district court described by this subsection has jurisdiction and venue of the action. This subsection is superior to any other provision of law establishing jurisdiction or venue with regard to an action for receivership.(e)
The attorney general may apply for and, on proper showing, is entitled to have a subpoena issued by the court that requires:(1)
the appearance, without delay, of a defendant or any employee, investment adviser representative, or agent of the defendant to testify and give evidence concerning a matter relevant to the appointment of a receiver; and(2)
the production of documents, books, and records that may be necessary for a hearing on the action.(f)
The court may appoint a receiver for the person or company or the person’s or company’s assets on the attorney general’s proper showing of the existence of the facts described by Subsection (b) with respect to the person or company.(g)
If the court appoints a receiver without providing the person or company with notice and an opportunity for hearing, the person or company may file with the court a written application for an order dissolving the receivership. If the application is filed not later than the 30th day after the date the person or company is served with the order appointing the receiver, the person or company is entitled to a hearing on the application not later than the 10th day after the date written notice is provided to the attorney general.(h)
A person may not be appointed as a receiver under this section unless the court finds that the person is qualified to discharge the duties of receiver after:(1)
hearing the views of:(A)
the attorney general;(B)
the commissioner; and(C)
the defendant against whom the appointment of a receiver is sought, if the court considers it practicable; and(2)
considering the probable nature and magnitude of the receiver’s duties in the particular case.(i)
The commissioner or attorney general may not be required to give a bond for receivership in an action brought under this section. The court shall require a person appointed as a receiver to give a bond that is:(1)
in an amount found by the court to be sufficient after considering the probable nature and magnitude of the receiver’s duties in the particular case; and(2)
conditioned on the faithful discharge of the receiver’s duties.(j)
The remedy provided by this section is in addition to any other remedy made available to the commissioner or the attorney general by statutory laws or case law of this state, including any provision authorizing receiverships.
Source:
Section 4007.151 — Receivership, https://statutes.capitol.texas.gov/Docs/GV/htm/GV.4007.htm#4007.151 (accessed May 4, 2024).
