Motion for Appointment of Receiver
Based on the foregoing, TWCA's motion for leave to intervene is denied. If no one requests oral argument, under Code of Civil Procedure section 1019.5(a) and California Rules of Court, rule 3.1312(a), no further written order is necessary. The minute order adopting this tentative ruling will become the order of the court and service by the clerk will constitute notice of the order. Court reporters are usually not available for law and motion matters in the civil division. The parties and counsel must provide their own reporter if they want a transcript of the proceedings.
Re: Bank of the Sierra vs. Sierra Forest Products Case No.: VCU335496 Date: June 26, 2026 Time: 8:30 A.M. Dept. 1-Honorable David C. Mathias Motion: Motion for Appointment of Receiver Tentative Ruling: To deny the motion without prejudice.
Bank of the Sierra (Bank) applied ex parte for appointment of a receiver and hearing on the application was continued to permit Sierra Forest Products (Sierra) additional time to file an opposition. Sierra has filed an opposition to the Bank's application.
A receiver may be appointed "where necessary to preserve the property or rights of" a party to a pending case, and "[i]n an action by a secured lender for specific performance of an assignment of rents provision in a deed of trust, mortgage, or separate assignment document." (Code Civ. Proc., 564, subds. (b)(9) & (11).) The Bank is a secured lender of Sierra. Sierra has a revolving line of credit with the Bank and has executed two security agreements granting the Bank a security interest in collateral described in the agreements. The security agreements give the Bank the right to have a receiver appointed with power to protect and preserve the collateral and to hold it as security for Sierra's indebtedness.
Sierra has been in default since April 15, 2026. Prior to that, in late February 2025, the Bank and Sierra entered a forbearance agreement, and, between April 2025 and February 2026, entered four amendments to the forbearance agreement. The Bank formally declared Sierra in default on May 1, 2026. As of May 13, 2026, Sierra's total outstanding balance with the Bank was approximately $2.5 million.
The Bank contends Sierra has "failed and refused to pay the outstanding balance" due on its credit line; continues to use its collateral "for its own benefit" and has not turned it over to the Bank; that the collateral "is exclusively personal property that is easily transferred, secreted, moved, hidden, used, dissipated and/or otherwise made unavailable to collection or for levy"; and that unless a receiver is appointed, the Bank will be prevented "from enjoying its right to the rents, profits and proceeds" from the collateral.
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Sierra, in opposition, maintains the Bank seeks appointment of a receiver "based on a default alone." According to Sierra, it is "is continuing to operate its business in the ordinary course, preserving the collateral, paying its employees, maintaining its insurance, and continuing its efforts to secure financing that would repay [the Bank]." According to Sierra's CEO, David Thomas, "[t]he collateral securing [the Bank's] loan is not being and has not been transferred, moved, hidden, used, or otherwise made unavailable for collection or for levy."
Thomas avers that, at present, he is "actively pursuing financing, capital investment, and transactions that would secure necessary capital to stabilize [Sierra's] operations and to pay [the Bank's] debt." Thomas specifically states he is "currently working with accountants (Baker Tilly/Moss Adams) and potential investors and equity partners (e.g., Ault Lending, LLC/Ault Capital Group, Inc. and Alpine Ridge Funding)," and, as of the date of his declaration, one of the "potential investors"/"equity partners," "Ault," "has access to [Sierra's] data room and has been actively reviewing [its] financial and operational information as part of [Ault's] due diligence process regarding a potential financing transaction."
Thomas asserts "appointment of a receiver will disrupt ongoing financing efforts."
ANALYSIS
"The appointment of a receiver is a drastic remedy, may involve unnecessary expense and hardship and courts carefully weigh the propriety of such appointment in exercising their discretion to appoint a receiver particularly if there is an alternative remedy." (Hoover v. Galbraith (1972) 7 Cal.3d 519, 528 [102 Cal.Rptr. 733, 498 P.2d 981].) Whether to appoint a receiver is a matter "largely" committed to the "discretion of the court," which discretion is to be exercised "according to the principles and usages of equity." (Barclays Bank of California v.
Superior Court (1977) 69 Cal.App.3d 593, 600 [137 Cal.Rptr. 743].) And, notwithstanding whether the parties, by agreement, consent to appointment of a receiver, such agreement will not establish "jurisdiction upon the superior court to appoint such a receiver. [Citations.]" (Ibid.) Although an agreement to appointment of a receiver, however, "is not binding upon the courts," such agreement "nevertheless has some evidentiary weight." (Id., at p. 602.) In this regard, "it presents a prima facie, but rebuttable, evidentiary showing of the beneficiary's entitlement to appointment of a receiver." (Ibid.)
The court finds Sierra makes a sufficient showing, at this stage, rebutting the Bank's prima facie entitlement to appointment of a receiver based on the security agreements. According to CEO Thomas, Sierra "remains operational and continues to conduct business on a daily basis," and "has ninety-three (93) full-time employees in Terra Bella and is current on payroll and insurance payments." Thomas represents, further, Sierra's "primary logging season is beginning, and [it] currently has approximately 34 million feet of logs under contract." Thomas avers that appointment of a receiver would "likely adversely affect [Sierra's] logging contracts and supplier relationships and [its] ability to operate efficiently, including impairing [its] ability to obtain logs necessary to fulfill its contractual obligations."
Further, the court is not persuaded, at this stage, that the Bank establishes that appointment of a receiver is necessary to preserve the property or rights of the Bank in the collateral. (Code Civ. Proc., Sec. 564, subd. (b)(9).) For the Bank's part, it only represents, based on the declaration of its senior vice president and credit administrator, Kelli Blackburn, that Sierra is using the collateral for "their exclusive and sole benefit" and that Sierra's continued use of its collateral to conduct its daily business affairs somehow jeopardizes its rights in the collateral, which the Bank conclusorily asserts is "easily transferred, secreted, moved, hidden, used, dissipated and/or otherwise made unavailable for collection or for levy."
The court finds appointment of a receiver on the Bank's application, based on the showing it has made here, and Sierra's rebuttal showing, appears premature, and, accordingly, the court denies Sierra's motion, at this stage, without prejudice. If no one requests oral argument, under Code of Civil Procedure section 1019.5(a) and California Rules of Court, rule 3.1312(a), no further written order is necessary. The minute order adopting this tentative ruling will become the order of the court and service by the clerk will constitute notice of the order. Court reporters are usually not available for law and motion matters in the civil division. The parties and counsel must provide their own reporter if they want a transcript of the proceedings.
Visalia-County Civic Center Honorable Bret D. Hillman Presiding- Department 2 Examiner notes for probate matters calendared June 15, 2026 and June 17, 2026, that allow for posting: Status: Recommended for Approval (RFA), Appearance Required or Recommended, Approval Conditional Upon, etc. Case Number | Case Name | Type | Status