In re Marriage of Liou, 2025 IL App (1st) 221630-U

1. Case citation and parties
- In re Marriage of Liou, 2025 IL App (1st) 221630-U (1st Dist. June 26, 2025).
- Plaintiff-Appellee: Say T. Liou. Defendant-Appellant: Timothy K. Liou. Receiver: Neal H. Levin (intervening receiver of Liou’s law firm).

2. Key legal issues
- Whether the trial court erred in awarding receivers’ fees and costs by (a) failing to follow Ill. S. Ct. R. 776, (b) not complying with a bankruptcy-court order, (c) failing to follow Cook County Cir. Ct. R. 8.2, (d) allowing block billing, and (e) awarding fees despite alleged receiver malfeasance.

3. Holding/outcome
- Appellate court affirmed the trial court’s order granting the receiver’s fee petitions.

4. Significant legal reasoning
- Source of appointment: The court analyzed the appointment order and concluded the receiver was appointed under the trial court’s equitable authority to preserve marital assets rather than strictly under Rule 776. Although the appointment referenced acting “consistent with” Rule 776(b), the order expressly set an hourly rate ($595/hr) and granted authority to manage/sell firm assets. Thus Rule 776’s default no-compensation rule (Rule 776(e)) did not control the compensation the trial court set.
- Bankruptcy court authority: Arguments that the receiver violated a bankruptcy-court order were forfeited for failure to raise them below. Further, federal bankruptcy decisions/orders do not bind Illinois state courts in managing their own domestic cases; the bankruptcy court lacked jurisdiction to dictate the state court’s receivership administration.
- Evidentiary basis: On remand the trial court held a full evidentiary hearing. Witness testimony (including firm forensic work identifying unauthorized access and efforts to conceal records) supported the receiver’s activities and fees. The trial court found rates reasonable and billed time consistent with the complexity created by appellant’s interference. The appellate court deferred to these factual findings.
- Procedural objections (local rules, block billing, malfeasance) were not shown to have prejudiced the appellant sufficiently to overturn the trial court’s discretionary fee award.

5. Practice implications
- Draft receivership/appointment orders with clarity: expressly state the statutory or rule basis (Rule 776 vs. inherent equitable power), compensation method, fee limits, and scope of authority to avoid later disputes.
- Raise procedural objections (jurisdictional conflicts, compliance with local rules) at the trial level or risk forfeiture.
- When defending or challenging receivers’ fees, secure an evidentiary hearing and develop record on necessity, hourly rates, time entries, and any alleged misconduct—appellate courts will defer to trial-court credibility and discretionary findings.
- Be mindful that bankruptcy court directions will not necessarily control state-court receiverships in family cases; coordinate forum strategy where concurrent jurisdiction exists.