At times, Referees are appointed by a Judge pursuant to a Court Order for matters related to the sale of certain assets. A Referee can be appointed to sell real property, review accountings, and various other matters that may arise in the course of a court proceeding. In some cases, Referees are required to file an undertaking or a bond to secure the faithful performance of their duties. The bond would have to be issued by a surety authorized to do business in the state in which it’s required and would have to be approved by the court.
In New York State Court proceedings, the bond is electronically filed. In Federal Court proceedings, the original bond is normally issued with the Orders & Judgments clerk.
The bond conditions or requirements are that the Referee will faithfully discharge all of their duties and perform according to their fiduciary responsibilities. They must account to the court for all monies received and expenses paid out by them related to their court appointment. Lastly, if the Referee is appointed to sell an asset, the bond also requires that the funds are dispersed properly. This is usually pursuant to a court order. It is suggested to motion the court to approve large distributions or expenditures since it is better to “ask for permission rather than forgiveness.”
To cancel a Referee Bond, the Referee must motion the court to allow them to conclude the matter by seeking permission to file a final accounting. Once approved by the court, the referee would file their final accounting. The Referee would then apply to the court to have their court appointment canceled and the bond released from any and all liability associated with the filing of the bond.
These cases are rarely bonded, but I recently received a call for a large bond of this type, so I decided to post an explanation of it.
PEDERSEN & SONS SURETY BOND AGENCY, INC.
15 Maiden Lane Suite #800
New York, NY 10038
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