The 10th Circuit Court of Appeals on March 9 issued an opinion that solidifies the legal rights of a court-appointed receiver.

When a court appoints a receiver to manage the assets and handle litigation for a group of defrauded investors, the receiver is often in the best position to get a favorable outcome for those investors. But a recent case challenged the common practice because a small group of investors wanted to pursue individual claims without the receiver. The outcome affirmed a district court rule that said a court-appointed receiver could represent a group of individuals victimized in fraud cases and that a district court may impose a claims bar order, which acts as an injunction against further claims brought by individuals involved in the case.

Melanie Vartabedian from Ballard Spahr in Utah represented the receiver in a case that challenged her standing to represent defrauded individuals. The precedent-setting case clarifies established practices that haven’t been challenged in the 10th Circuit before, according to an attorney on the case.

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