Hiatt_v._Shah

In 2010 upset Arizona investors sued a video developer in Maricopa County Court. There ended up being three separate cases. The Judge appointed a receiver to handle this. Later, in a settlement agreement the receiver issued Receivership Certificates to Hiatt and Shah granting them powerful purchase rights on receivership assets. The developer was unable to complete its game and the receiver decided to liquidate. The court set a claims bar date. Hiatt failed to submit a claim until several weeks after the bar date. The receiver wanted to allow Hiatt’s untimely claim because it was a receivership debt and the receiver had actual notice of it. Shah objected but the court approved the distribution plan, which included Hiatt. Shah, pretty upset then appealed.
The Court of Appeals held that receivership courts have broad discretion accept claims made after a bar date. A review of cases from other jurisdictions supports the holding that courts can exercise equitable discretion over late-filed claims. The Arizona Court of Appeals summarized: Hiatt, in good faith, did not believe a claim was necessary; the receiver and other parties were already aware of the claim; and the claim delay was relatively short and inconsequential. The Court of Appeals declined to address whether excusable neglect was the standard for allowing untimely claims because Shah waived that issue by failing to raise it below. Just watch your key Court dates. If you miss one, there are sometimes remedies. Feel free to call Bill Miller at 602-319-6899 to discuss.

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