Short answer. Yes. Whoever files a bond must promptly serve a copy on each interested party, who may except to its sufficiency or the sureties'. If the applicant's or receiver's bond fails and is not promptly cured, the application is denied or the receiver discharged; if the adverse party's bond fails and is not cured, the receiver is appointed or re-appointed.
What the law says
The person filing a bond in accordance with the provisions of this Rule shall forthwith serve a copy thereof on each interested party, who may except to its sufficiency or of the surety or sureties thereon. If either the applicant's or the receiver's bond is found to be insufficient in amount, or if the surety or sureties thereon fail to justify, and a bond sufficient in amount with sufficient sureties approved after justification is not filed forthwith, the application shall be denied or the receiver discharged, as the case may be. If bond of the adverse party is found to be insufficient in amount or the surety or sureties thereon fail to justify, and a bond sufficient in amount with sufficient sureties approved after justification is not filed forthwith, the receiver shall be appointed or re-appointed, as the case may be.
Rule 59, Section 5 — Service of copies of bonds; effect of disapproval of same. Read the full provision →
Service and the right to except
Rule 59, Section 5 requires that every bond filed under the receivership Rule be promptly served on each interested party. Once served, that party may except to the sufficiency of the bond itself or to the sufficiency of the surety or sureties standing behind it, making bond adequacy a live issue rather than something taken for granted. The service requirement matters because a party cannot object to a bond it does not know exists or has not seen the terms of; giving every interested party prompt notice of a filed bond is what makes the right to except meaningful rather than merely theoretical.
Consequences when the applicant's or receiver's bond fails
If the applicant's or the receiver's bond is found insufficient in amount, or the sureties fail to justify, the party has a chance to promptly file a sufficient, properly justified replacement bond. If that replacement is not filed forthwith, the consequence is significant: the application is denied, or the already-appointed receiver is discharged. This puts real pressure on whoever is responsible for the bond to get it right the first time, or at least to cure any defect immediately once an objection is raised, since delay in filing a proper replacement carries the same consequence as never posting an adequate bond at all.
The mirror consequence for the adverse party's bond
The section applies the identical logic in reverse. When it is the adverse party's bond — typically a counter-bond meant to defeat or discharge the receivership under Section 3 — that is found insufficient and not promptly cured, the result flips: the receiver is appointed, or re-appointed if one had been discharged. This symmetry means neither side gets a free pass on bond quality: an applicant or receiver whose bond is defective loses the security they relied on to justify or maintain the receivership, and an adverse party whose counter-bond is defective loses the protection that was keeping the receiver out.
Related provisions
- Rule 59, Section 5 — Service of copies of bonds; effect of disapproval of same
- Rule 59, Section 3 — Denial of application or discharge of receiver
- Rule 59, Section 4 — Oath and bond of receiver