Arizona Court of Appeals Division One holds that receivership courts have broad equitable discretion to accept or reject claims made after a claims bar date.

Various investors sued a video game developer which led to a receivership.  Under a partial settlement agreement the receiver issued Receivership Certificates to Hiatt and Shah granting them senior rights on receivership assets.  The game developer was unable to complete its product and the receiver decided to liquidate and distribute all assets.  The court set a claims bar date but Hiatt failed to submit a claim until several weeks after the bar date.  The receiver sought to allow Hiatt’s untimely claim because it was a receivership debt and the receiver had notice of it.  Shah objected but the trial court approved the distribution plan.  Shah appealed.     

The Court of Appeals held that receivership courts have broad equitable discretion whether to accept or reject 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.  Here the court did not abuse its discretion because:  Hiatt 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.

Presiding Judge Kessler authored the opinion; Judges Gould and Norris concurred.