Fidelity Bank v. Key Hotels of Brewton, LLC, 1:15-cv-00031

Fidelity Bank sued Key Hotels of Brewton, LLC and its sole member Anand Patel to enforce a loan and security interest after alleged default on a $1,885,032.54 debt and sought possession of hotel collateral.
Fidelity filed an amended complaint adding a request for appointment of a receiver after inspecting the Ramada Hotel and citing dilapidation and a State Fire Marshal "Cease and Desist" order.
Fidelity moved ex parte for immediate appointment of a receiver and expedited hearing, asserting imminent danger to its collateral and public safety.
Process-server affidavits showed the Hotel was closed and undergoing renovation with workmen on site; the server could not locate Patel.
The bank presented evidence that the Fire Marshal’s concerns dated back more than six months and that renovation work was occurring at the property.
The district court denied the ex parte emergency request, concluding Fidelity failed to show exigent circumstances justifying appointment without notice, but granted leave to renew with proper notice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a receiver may be appointed ex parte for the Hotel	Fidelity: imminent danger to collateral and public safety from fire hazard and roof deterioration justifies emergency, no-notice receivership	Key Hotels/Patel: (implied) notice is required; no proof of imminent loss, property closed and under renovation, workers present	Denied — no exigent circumstances shown to justify ex parte appointment; must give notice
Whether the Hotel’s condition posed an imminent threat to collateral	Fidelity: structure deteriorating and declared fire hazard, risk of material loss	Evidence showed fire-hazard findings predated filings and renovation work was ongoing, undermining urgency	Denied — not shown the property would suffer imminent loss during time required to give notice
Whether public-safety concerns warrant ex parte relief	Fidelity: Cease-and-Desist and fire hazard threaten public welfare	Court: Hotel is closed and unoccupied; public-safety risk not shown to be immediate or extreme	Denied — public-safety claim insufficiently urgent to bypass notice
Whether contractual receiver clause allows ex parte appointment without notice	Fidelity: mortgage clause permits appointment without notice	Court: contractual provision does not override equitable discretion; courts may deny receivership despite contract	Denied — contract does not compel ex parte receivership absent extreme emergency

United States v. Bradley, 644 F.3d 1213 (11th Cir. 2011) (appointing a receiver is an extraordinary equitable remedy)
National Partnership Inv. Corp. v. National Housing Development Corp., 153 F.3d 1289 (11th Cir. 1998) (receivership is ancillary relief, not a substantive right)
Netsphere, Inc. v. Baron, 703 F.3d 296 (5th Cir. 2012) (receivership justified only where clear necessity exists and less drastic remedies are inadequate)
Arkansas Louisiana Gas Co. v. Kroeger, 303 F.2d 129 (5th Cir. 1962) (as a general rule a receiver should not be appointed without notice)
Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423 (1974) (ex parte emergency motions are disfavored; parties should have notice and opportunity to be heard)
Marion Mortg. Co. v. Edmunds, 64 F.2d 248 (5th Cir. 1933) (temporary receiverships without notice only when notice is impracticable due to hiding or imminent danger)
Maxwell v. Enterprise Wall Paper Mfg. Co., 131 F.2d 400 (3d Cir. 1942) (heightened caution when seeking peremptory ex parte receivership)