As Introduced

130th General Assembly
Regular Session
2013-2014
H. B. No. 9


Representative Stautberg 


A BILL
To amend sections 2333.22, 2715.21, 2735.01, 2735.02, 1
and 2735.04 of the Revised Code to add to and 2
clarify the powers of a receiver and to provide a 3
procedure for a receiver's sale of real property.4


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That sections 2333.22, 2715.21, 2735.01, 2735.02, 5
and 2735.04 of the Revised Code be amended to read as follows:6

       Sec. 2333.22. (A) In proceedings under sections 2333.09 to 7
2333.27, inclusive, of the Revised Code, the judge by order may 8
appoint the sheriff of the proper county, or other suitable 9
person, a receiver of the property of the judgment debtor. Such10

       (B) The judge alsowho appointed the receiver under division 11
(A) of this section, by order, may forbid a transfer, or other 12
disposition of or interference with, the property of the judgment 13
debtor not exempt by law.14

       (C) Under the control of the judge who appointed a receiver 15
under division (A) of this section and except as ordered by the 16
judge under division (B) of this section, the receiver may do any 17
of the acts specified in section 2735.04 of the Revised Code.18

       Sec. 2715.21. (A) The receiver appointed under section 19
2715.20 of the Revised Code shall take possession of all notes, 20
due bills, books of account, accounts, and other evidences of 21
debt, that have been taken by the levying officer as the property 22
of the defendant in attachment, and proceed to settle and collect 23
them. For that purpose, the receiver may commence and maintain 24
actions in histhe receiver's own name, as receiver, but no right 25
of defense thereinin the action shall be impaired or affected.26

       (B) Under the control of the court that appointed the 27
receiver under section 2715.20 of the Revised Code, the receiver 28
may do any of the acts specified in section 2735.04 of the Revised 29
Code.30

       Sec. 2735.01. (A) A receiver may be appointed by the supreme 31
court or a judge thereof, the court of appeals or a judge thereof 32
in histhe judge's district, the court of common pleas or a judge 33
thereof in histhe judge's county, or the probate court, in causes 34
pending in such courts respectively, in the following cases:35

       (A)(1) In an action by a vendor to vacate a fraudulent 36
purchase of property, or by a creditor to subject property or a 37
fund to histhe creditor's claim, or between partners or others 38
jointly owning or interested in any property or fund, on the 39
application of the plaintiff, or of a party whose right to or 40
interest in the property or fund, or the proceeds thereofof the 41
property or fund, is probable, and when it is shown that the 42
property or fund is in danger of being lost, removed, or 43
materially injured;44

       (B)(2) In an action by a mortgagee, for the foreclosure of 45
histhe mortgagee's mortgage and sale of the mortgagemortgaged46
property, when it appears that the mortgaged property is in danger 47
of being lost, removed, or materially injured, diminished in 48
value, or squandered, or that the condition of the mortgage has 49
not been performed, and theeither of the following applies:50

       (a) The property is probably insufficient to discharge the 51
mortgage debt.52

       (b) The mortgagor has consented in writing to the appointment 53
of a receiver.54

       (3) To enforce a contractual assignment of rents and leases;55

       (C)(4) After judgment, to carry the judgment into effect;56

       (D)(5) After judgment, to dispose of the property according 57
to the judgment, or to preserve it during the pendency of an 58
appeal, or when an execution has been returned unsatisfied and the 59
judgment debtor refuses to apply the property in satisfaction of 60
the judgment;61

       (E)(6) When a corporation, limited liability company, 62
partnership, limited partnership, or other entity has been 63
dissolved, or is insolvent, oris in imminent danger of 64
insolvency, or has forfeited its corporate, limited liability 65
company, partnership, limited partnership, or other entity rights;66

       (F)(7) In all other cases in which receivers have been 67
appointed by the usages of equity.68

       (B) A receiver appointed under division (A)(1), (2), (3), or 69
(5) of this section shall be appointed only with respect to the 70
particular property that is the subject of the action in which the 71
appointment of a receiver is sought.72

        (C) A receiver appointed under division (A)(6) of this 73
section may be appointed to manage the affairs of the corporation, 74
limited liability company, partnership, limited partnership, or 75
other entity with respect to which the appointment of a receiver 76
is sought.77

        (D) A receiver appointed under division (A)(4) or (7) of this 78
section may be appointed to manage all the affairs of the 79
corporation, limited liability company, partnership, limited 80
partnership, or other entity, or only with respect to particular 81
property as determined by the court.82

       Sec. 2735.02.  No party, attorney for a party, or person 83
interested in an action shall be appointed receiver thereinin the 84
action except by consent of all of the parties to the case and all 85
other persons holding a recorded ownership interest in or 86
financial lien on the property that is subject to the proceeding. 87
No person except a resident of this state shall be appointed or 88
act as receiver of a railroad or other corporation within, 89
partnership, limited liability company, or other entity created 90
under the laws of this state. In selecting a receiver, priority 91
consideration shall be afforded to any of the qualified persons 92
nominated by the party seeking the receivership. No nomination of 93
qualified persons for the receivership is binding upon the court.94

       Sec. 2735.04. (A) The powers of a receiver shall be set 95
forth in the order of the court that appointed the receiver as 96
those powers may be modified by the court or as otherwise approved 97
by the court upon application of the receiver or a party to the 98
action.99

       (B) Under the control of the court whichthat appointed him,100
the receiver as provided in section 2735.01 of the Revised Code, a101
the receiver may bringdo any of the following:102

       (1) Bring and defend actions in histhe receiver's own name 103
as receiver, take;104

       (2) Take and keep possession of real or personal property, 105
receive;106

       (3) Receive rents, collect, compound forother obligations, 107
and compromise demands, make;108

       (4) Subject to division (C) of this section, enter into 109
contracts, including, but not limited to contracts of sale, lease, 110
or construction and contracts for the completion of construction 111
work;112

       (5) Make transfers, and generallyof real or personal 113
property;114

       (6) Execute deeds, leases, or other documents of conveyance 115
of real or personal property;116

       (7) Open and maintain deposit accounts in the receiver's 117
name;118

       (8) Generally do suchany other acts respecting the property 119
asthat the court authorizes.120

       (C) Any funds that are expended by or on behalf of the 121
receiver, including receivership fees, fees for professionals 122
assisting the receivership, and those expended in entering into or 123
performing contracts under division (B)(4) of this section, 124
including those for the completion of construction work authorized 125
by the court, shall be taxed as court costs or otherwise treated 126
as a priority administrative expense of the proceeding. The court 127
may from time to time require an additional deposit to cover that 128
administrative expense by the party that sought the receivership 129
or by all parties likely to be directly benefited by the 130
construction work.131

       (D)(1)(a) Subject to the approval and supervision of the 132
court and the requirements of this section, a receiver may sell 133
property free and clear of liens by private sale pursuant to a 134
written contract between the receiver and the prospective 135
purchaser, by private auction, by public auction, or by any other 136
method that the court determines is fair to the owner of the 137
property and all other parties with an interest in the property, 138
is reasonable under the circumstances, and will maximize the 139
return from the property to the receivership estate, taking into 140
account the potential cost of holding and operating the property.141

       (b) Before entering an order authorizing the sale of the 142
property by the receiver, the court may require that the receiver 143
provide evidence of the fair market value of the property. That 144
valuation may be provided by expert appraisal testimony or any 145
other evidence that the court determines is appropriate. In a 146
public or private auction, the court may establish a minimum bid.147

       (c) If the receiver requests authority to sell the property 148
pursuant to a prospective purchase contract, the court may require 149
that the receiver solicit additional offers. If the receiver 150
ultimately sells the property to a party other than the original 151
proposed purchaser, if approved by the court, the receiver may pay 152
to the unsuccessful original proposed purchaser a fee from the 153
sale proceeds in an amount determined by the court to compensate 154
that proposed purchaser for participation in the sale process.155

       (2) Any sale of real property under division (B)(5) of this 156
section shall be made only after all of the following occur:157

       (a) An application is made by the receiver or the first 158
mortgage holder that requests that the receiver be granted the 159
authority to sell the specific property and sets forth either of 160
the following: 161

       (i) If the receiver has not received a specific offer for 162
sale that the receiver desires to accept, the proposed procedures 163
for the conduct of the sale;164

       (ii) If the receiver has received a specific offer for sale 165
that the receiver desires to accept, the identity of the buyer and 166
the proposed terms of the sale.167

       (b) At least ten days' prior written notice is given in 168
accordance with the Rules of Civil Procedure to all of the owners 169
of the property, all parties to the action, and all parties with 170
an interest in the property to be sold as those parties are 171
identified in a preliminary judicial report or a commitment for an 172
owner's fee policy of title insurance previously filed with the 173
court pursuant to section 2329.191 of the Revised Code or, if not 174
previously filed, in a preliminary judicial report or a commitment 175
for an owner's fee policy of title insurance filed with the 176
application of the receiver for authority to sell the property 177
that otherwise complies with the requirements of section 2329.191 178
of the Revised Code, unless the lien or interest of that party is 179
barred by lis pendens pursuant to section 2703.26 of the Revised 180
Code.181

       (c) An opportunity is given for a hearing at which all of the 182
parties to whom the notice is given under division (D)(2)(b) of 183
this section may be heard, provided that if no party objects to 184
the proposed sale or requests a hearing within the period provided 185
pursuant to that division, the court may proceed without a 186
hearing.187

       (d) The court issues an order of sale of the property that 188
sets forth the required procedure for or the terms of the sale. 189
The order of sale is the final appealable order with respect to 190
the matters contained in the order. 191

       (3)(a) If requested in the receiver's application for 192
authority to sell the property under division (D)(2)(a) of this 193
section, upon a finding by the court after notice and an 194
opportunity for a hearing as provided in divisions (D)(2)(b) and 195
(c) of this section that it is in the best interest of the 196
receivership estate that the property be sold free and clear of 197
liens, the court may order that the property be sold free and 198
clear of all liens other than the lien of the treasurer of the 199
county in which the property is located for real estate taxes and 200
assessments.201

       (b) In the event of a sale free and clear of liens, upon the 202
recording of the deed by the receiver to the purchaser, those 203
liens shall be canceled as to the property and shall be 204
transferred to the proceeds of the sale in the hands of the 205
receiver with the same priority as those liens previously attached 206
to the property sold.207

       (4) The sale of property under division (D)(2) of this 208
section is in lieu of a sale pursuant to Chapter 2329. of the 209
Revised Code, and except as provided in that division with respect 210
to the applicability of sections 2329.191 and 2329.37 of the 211
Revised Code, the provisions of Chapter 2329. of the Revised Code 212
do not apply to that sale. 213

       (5) If the contemplated sale of property is under division 214
(D)(2)(a)(ii) of this section, the court may finally approve the 215
sale, and no separate confirmation order is required.216

       (6) If the contemplated sale of property is under division 217
(D)(2)(a)(i) of this section, following the sale or auction 218
process described in the application, the receiver or first 219
mortgage holder shall seek an order confirming the sale process 220
and approving the proposed sale.221

       (7) The court's order approving the application by a receiver 222
or first mortgage holder for authority to sell property under 223
division (D)(2)(a) of this section shall establish a reasonable 224
time, but not less than three days, after the date of the order 225
approving the specific sale or the sale process for the owner and 226
all other parties possessing an equity of redemption in the 227
property to exercise their equity of redemption in the property or 228
to have that equity of redemption forever barred. Section 2329.33 229
of the Revised Code does not apply to a sale by a receiver under 230
this section.231

       (8)(a) Until the date the court sets for the termination of 232
the fee owner's time to redeem the property, any fee owner of the 233
property proposed to be sold may redeem the property from the sale 234
by paying to the receiver by cashier's check or other form of 235
immediately available funds an amount equal to the greater of the 236
following:237

        (i) The sale price at which the property was sold;238

        (ii) An amount equal to the total of all liens upon the 239
property that were to be canceled as liens upon the property by 240
virtue of the sale, including all principal, interest, costs, and 241
other amounts secured by those liens through the date of payment 242
to the receiver.243

       (b) The amount determined under division (D)(8)(a)(i) or (ii) 244
of this section shall include interest on the amount of the sale 245
price at the rate of eight per cent per annum from the date of the 246
sale to the date of the payment of the full amount to the 247
receiver. 248

       (c) Upon receipt of the amount determined under divisions 249
(D)(8)(a) and (b) of this section, the receiver shall advise the 250
court and all of the parties to whom notice was given pursuant to 251
division (D)(2)(b) of this section of the receipt of that amount 252
and shall set aside the sale. The fee title to the property shall 253
remain in the name of the owner of the property, and the liens 254
upon the property, except as provided in division (D)(3) of this 255
section, shall be transferred in the same order of priority to the 256
proceeds received by the receiver from the owner of the property.257

       (9) If the sale of the property by the receiver under 258
division (D)(2) of this section is conducted in accordance with 259
the terms of the order of the court authorizing the sale, upon 260
closing of the sale the receiver shall execute and deliver a 261
receiver's deed for the property sold to the purchaser. The 262
receiver's deed has the effect provided for in section 2329.37 of 263
the Revised Code.264

       (10) If the contemplated sale of the property is under 265
division (D)(2)(a)(ii) of this section, within ten days following 266
the delivery of the deed to the purchaser under division (D)(9) of 267
this section or as soon thereafter as is reasonably possible, the 268
receiver shall file with the court and serve upon all of the 269
parties to whom the notice of the application for the authority to 270
sell the property was given under division (D)(2)(b) of this 271
section a certificate and report of sale in which the receiver 272
certifies all of the following:273

       (a) That the sale was conducted in accordance with the order 274
authorizing the sale;275

       (b) The date of the sale; 276

       (c) The name of the purchaser;277

       (d) The purchase price;278

       (e) The amount of the net proceeds of the sale after payment 279
of all expenses associated with the sale;280

       (f) A copy of the HUD-1 closing statement, if the HUD-1 281
closing statement was prepared;282

       (g) Any other information that the court may require.283

       Section 2. That existing sections 2333.22, 2715.21, 2735.01, 284
2735.02, and 2735.04 of the Revised Code are hereby repealed.285