Posted on April 17, 2015
Late last month, House Bill 9, which enacted the first changes to Ohio’s receivership statute in six decades, took effect. Receivership is a legal process by which a “receiver” is appointed by a court of a receiver to take custody of the property, business, rents and profits of a party to a lawsuit for the benefit of creditors. The changes are intended to clarify the procedure by which a court appoints receivers, as well as clarify expand the powers a receiver is permitted to exercise.
Of particular importance are the revisions to the statute which confer upon receivers new powers to manage and dispose of assets. Under the former version of the statute, a receiver could “bring and defend actions in his own name as receiver, take and keep possession of property, receive rents, collect, compound for, and compromise demands, make transfers, and generally do such acts respecting the property as the court authorizes.” In addition to retaining these powers, a receiver now has the authority to:
Perhaps the most sweeping change made to the receivership statute is the inclusion of new Section 2735.04(D), which deals with receiver sales, the most important of which is subsection (1) dealing with sales “free and clear” of junior liens and other interests. Subsection (1) authorizes a receiver to sell property “free and clear” of liens by private sale pursuant to a written contract, by private auction, by public auction, or by any other method that the court determines to be reasonable under the circumstances. Under the new provisions of R.C. 2735.04(D)(2)(b), the receiver is only required to give ten days notice to owners or lienholders prior to the sale of property, drastically streamlining the process and reducing the cost of holding and operating a property pending a sale.
The revisions to the statute are still too new to determine whether they will have a significant impact on receivership proceedings in Ohio. For questions regarding Ohio’s receivership statute, or any other aspect of Ohio law, please Todd Harpst or Nick Horrigan, at Harpst Ross, Ltd. – Business Lawyers for the Construction Industry®, at (330) 983-9971 or email@example.com or firstname.lastname@example.org.
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