What is the difference between a privately appointed receiver and a court-appointed receiver?

A privately appointed receiver is appointed directly by a secured lender under the powers set out in its own security agreement, without first going to court, and generally takes control of the debtor's specific assets or business to realize on the lender's security following a default. A court-appointed receiver is instead appointed by a judge on application, typically where the lender wants court supervision and broader protection, or where the security document's private appointment powers aren't robust enough for the situation.

The practical differences flow from that distinction. A court-appointed receiver generally owes duties to the court and to stakeholders more broadly, not only to the appointing lender, and operates under ongoing court oversight and reporting obligations, which can make its actions harder for other creditors or the debtor to challenge later. A privately appointed receiver still owes duties to act reasonably and in good faith, but has more flexibility and less procedural formality, at the cost of potentially more exposure to challenge since there's no court order clearly defining its authority. Lenders often prefer the court-appointed route for larger, more complex, or more contested enforcement situations, and the private route for more straightforward ones. Which is appropriate depends on the specific default and assets involved.