-
-
- The Owner is required to furnish a detailed list of all creditors to the Receiver.
- The Receiver is required to send notice to all creditors within seven days of receiving the list.
- The law requires quarterly reporting. Although, I personally favor monthly reporting.
- A Receiver can be appointed by a court in the enforcement of a lien or security agreement when a borrower has agreed to it in the loan documents.
- There is a clear process for the appointment of a Receiver by a court or the parties.
- It requires notice and the opportunity for a hearing before property can be sold from the receivership estate.
- A Receiver can “claw back” fraudulent transfers but not preference payments as in bankruptcy.
- A Receiver can operate a business.
- A Receiver can compel a person to testify under oath and to produce records or tangible things that relate to the receivership property.
- The Receiver can reject executory contracts.
- A Receiver can recommend the allowance or disallowance of a creditors claim.
- The appointment of a Receiver acts as a stay of any action seeking to enforce a claim or lien on the receivership property.
- Under certain circumstances, a Receiver may transfer or sell receivership property free and clear of liens.
- A Receivership can now include not only commercial real property and the associated personal property but any commercial personal property such as a business and its books, records and accounts.
-
With this latest revision, the drafters have made progress in establishing a receivership law that comes closer to a uniform law that will someday be applicable to all receivership situations. In the meantime, this one will do nicely.
Burke Advisory Services
October 27, 2020
Kevin Burke is a member of the Turnaround Management Association and a Certified Turnaround Professional. A graduate of the Villanova School of Business, he has over 35 years of experience in banking and executive management. His management consulting practice is located in Troy, Michigan.