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H. B. No. 9 As IntroducedAs Introduced
130th General Assembly | Regular Session | 2013-2014 |
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A BILL
To amend sections 2333.22, 2715.21, 2735.01, 2735.02,
and 2735.04 of the Revised Code to add to and
clarify the powers of a receiver and to provide a
procedure for a receiver's sale of real property.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 2333.22, 2715.21, 2735.01, 2735.02,
and 2735.04 of the Revised Code be amended to read as follows:
Sec. 2333.22. (A) In proceedings under sections 2333.09 to
2333.27, inclusive, of the Revised Code, the judge by order may
appoint the sheriff of the proper county, or other suitable
person, a receiver of the property of the judgment debtor. Such
(B) The judge also who appointed the receiver under division
(A) of this section, by order, may forbid a transfer, or other
disposition of or interference with, the property of the judgment
debtor not exempt by law.
(C) Under the control of the judge who appointed a receiver
under division (A) of this section and except as ordered by the
judge under division (B) of this section, the receiver may do any
of the acts specified in section 2735.04 of the Revised Code.
Sec. 2715.21. (A) The receiver appointed under section
2715.20 of the Revised Code shall take possession of all notes,
due bills, books of account, accounts, and other evidences of
debt, that have been taken by the levying officer as the property
of the defendant in attachment, and proceed to settle and collect
them. For that purpose, the receiver may commence and maintain
actions in his the receiver's own name, as receiver, but no right
of defense therein in the action shall be impaired or affected.
(B) Under the control of the court that appointed the
receiver under section 2715.20 of the Revised Code, the receiver
may do any of the acts specified in section 2735.04 of the Revised
Code.
Sec. 2735.01. (A) A receiver may be appointed by the supreme
court or a judge thereof, the court of appeals or a judge thereof
in his the judge's district, the court of common pleas or a judge
thereof in
his the judge's county, or the probate court, in causes
pending in such courts respectively, in the following cases:
(A)(1) In an action by a vendor to vacate a fraudulent
purchase of property, or by a creditor to subject property or a
fund to his the creditor's claim, or between partners or others
jointly owning or interested in any property or fund, on the
application of the plaintiff, or of a party whose right to or
interest in the property or fund, or the proceeds thereof of the
property or fund, is probable, and when it is shown that the
property or fund is in danger of being lost, removed, or
materially injured;
(B)(2) In an action by a mortgagee, for the foreclosure of
his the mortgagee's mortgage and sale of the mortgage mortgaged
property, when it appears that the mortgaged property is in danger
of being lost, removed, or materially injured, diminished in
value, or squandered, or that the condition of the mortgage has
not been performed, and the either of the following applies:
(a) The property is probably insufficient to discharge the
mortgage debt.
(b) The mortgagor has consented in writing to the appointment
of a receiver.
(3) To enforce a contractual assignment of rents and leases;
(C)(4) After judgment, to carry the judgment into effect;
(D)(5) After judgment, to dispose of the property according
to the judgment, or to preserve it during the pendency of an
appeal, or when an execution has been returned unsatisfied and the
judgment debtor refuses to apply the property in satisfaction of
the judgment;
(E)(6) When a corporation, limited liability company,
partnership, limited partnership, or other entity has been
dissolved, or is insolvent, or is in imminent danger of
insolvency, or has forfeited its corporate, limited liability
company, partnership, limited partnership, or other entity rights;
(F)(7) In all other cases in which receivers have been
appointed by the usages of equity.
(B) A receiver appointed under division (A)(1), (2), (3), or
(5) of this section shall be appointed only with respect to the
particular property that is the subject of the action in which the
appointment of a receiver is sought.
(C) A receiver appointed under division (A)(6) of this
section may be appointed to manage the affairs of the corporation,
limited liability company, partnership, limited partnership, or
other entity with respect to which the appointment of a receiver
is sought.
(D) A receiver appointed under division (A)(4) or (7) of this
section may be appointed to manage all the affairs of the
corporation, limited liability company, partnership, limited
partnership, or other entity, or only with respect to particular
property as determined by the court.
Sec. 2735.02. No party, attorney for a party, or person
interested in an action shall be appointed receiver therein in the
action except by consent of all of the parties to the case and all
other persons holding a recorded ownership interest in or
financial lien on the property that is subject to the proceeding.
No person except a resident of this state shall be appointed or
act as receiver of a
railroad or other corporation within,
partnership, limited liability company, or other entity created
under the laws of this state. In selecting a receiver, priority
consideration shall be afforded to any of the qualified persons
nominated by the party seeking the receivership. No nomination of
qualified persons for the receivership is binding upon the court.
Sec. 2735.04. (A) The powers of a receiver shall be set
forth in the order of the court that appointed the receiver as
those powers may be modified by the court or as otherwise approved
by the court upon application of the receiver or a party to the
action.
(B) Under the control of the court which that appointed him,
the receiver as provided in section 2735.01 of the Revised Code,
a
the receiver may bring do any of the following:
(1) Bring and defend actions in his the receiver's own name
as receiver, take;
(2) Take and keep possession of real or personal property,
receive;
(3) Receive rents, collect, compound for other obligations,
and compromise demands, make;
(4) Subject to division (C) of this section, enter into
contracts, including, but not limited to contracts of sale, lease,
or construction and contracts for the completion of construction
work;
(5) Make transfers, and generally of real or personal
property;
(6) Execute deeds, leases, or other documents of conveyance
of real or personal property;
(7) Open and maintain deposit accounts in the receiver's
name;
(8) Generally do such any other acts respecting the property
as that the court authorizes.
(C) Any funds that are expended by or on behalf of the
receiver, including receivership fees, fees for professionals
assisting the receivership, and those expended in entering into or
performing contracts under division (B)(4) of this section,
including those for the completion of construction work authorized
by the court, shall be taxed as court costs or otherwise treated
as a priority administrative expense of the proceeding. The court
may from time to time require an additional deposit to cover that
administrative expense by the party that sought the receivership
or by all parties likely to be directly benefited by the
construction work.
(D)(1)(a) Subject to the approval and supervision of the
court and the requirements of this section, a receiver may sell
property free and clear of liens by private sale pursuant to a
written contract between the receiver and the prospective
purchaser, by private auction, by public auction, or by any other
method that the court determines is fair to the owner of the
property and all other parties with an interest in the property,
is reasonable under the circumstances, and will maximize the
return from the property to the receivership estate, taking into
account the potential cost of holding and operating the property.
(b) Before entering an order authorizing the sale of the
property by the receiver, the court may require that the receiver
provide evidence of the fair market value of the property. That
valuation may be provided by expert appraisal testimony or any
other evidence that the court determines is appropriate. In a
public or private auction, the court may establish a minimum bid.
(c) If the receiver requests authority to sell the property
pursuant to a prospective purchase contract, the court may require
that the receiver solicit additional offers. If the receiver
ultimately sells the property to a party other than the original
proposed purchaser, if approved by the court, the receiver may pay
to the unsuccessful original proposed purchaser a fee from the
sale proceeds in an amount determined by the court to compensate
that proposed purchaser for participation in the sale process.
(2) Any sale of real property under division (B)(5) of this
section shall be made only after all of the following occur:
(a) An application is made by the receiver or the first
mortgage holder that requests that the receiver be granted the
authority to sell the specific property and sets forth either of
the following:
(i) If the receiver has not received a specific offer for
sale that the receiver desires to accept, the proposed procedures
for the conduct of the sale;
(ii) If the receiver has received a specific offer for sale
that the receiver desires to accept, the identity of the buyer and
the proposed terms of the sale.
(b) At least ten days' prior written notice is given in
accordance with the Rules of Civil Procedure to all of the owners
of the property, all parties to the action, and all parties with
an interest in the property to be sold as those parties are
identified in a preliminary judicial report or a commitment for an
owner's fee policy of title insurance previously filed with the
court pursuant to section 2329.191 of the Revised Code or, if not
previously filed, in a preliminary judicial report or a commitment
for an owner's fee policy of title insurance filed with the
application of the receiver for authority to sell the property
that otherwise complies with the requirements of section 2329.191
of the Revised Code, unless the lien or interest of that party is
barred by lis pendens pursuant to section 2703.26 of the Revised
Code.
(c) An opportunity is given for a hearing at which all of the
parties to whom the notice is given under division (D)(2)(b) of
this section may be heard, provided that if no party objects to
the proposed sale or requests a hearing within the period provided
pursuant to that division, the court may proceed without a
hearing.
(d) The court issues an order of sale of the property that
sets forth the required procedure for or the terms of the sale.
The order of sale is the final appealable order with respect to
the matters contained in the order.
(3)(a) If requested in the receiver's application for
authority to sell the property under division (D)(2)(a) of this
section, upon a finding by the court after notice and an
opportunity for a hearing as provided in divisions (D)(2)(b) and
(c) of this section that it is in the best interest of the
receivership estate that the property be sold free and clear of
liens, the court may order that the property be sold free and
clear of all liens other than the lien of the treasurer of the
county in which the property is located for real estate taxes and
assessments.
(b) In the event of a sale free and clear of liens, upon the
recording of the deed by the receiver to the purchaser, those
liens shall be canceled as to the property and shall be
transferred to the proceeds of the sale in the hands of the
receiver with the same priority as those liens previously attached
to the property sold.
(4) The sale of property under division (D)(2) of this
section is in lieu of a sale pursuant to Chapter 2329. of the
Revised Code, and except as provided in that division with respect
to the applicability of sections 2329.191 and 2329.37 of the
Revised Code, the provisions of Chapter 2329. of the Revised Code
do not apply to that sale.
(5) If the contemplated sale of property is under division
(D)(2)(a)(ii) of this section, the court may finally approve the
sale, and no separate confirmation order is required.
(6) If the contemplated sale of property is under division
(D)(2)(a)(i) of this section, following the sale or auction
process described in the application, the receiver or first
mortgage holder shall seek an order confirming the sale process
and approving the proposed sale.
(7) The court's order approving the application by a receiver
or first mortgage holder for authority to sell property under
division (D)(2)(a) of this section shall establish a reasonable
time, but not less than three days, after the date of the order
approving the specific sale or the sale process for the owner and
all other parties possessing an equity of redemption in the
property to exercise their equity of redemption in the property or
to have that equity of redemption forever barred. Section 2329.33
of the Revised Code does not apply to a sale by a receiver under
this section.
(8)(a) Until the date the court sets for the termination of
the fee owner's time to redeem the property, any fee owner of the
property proposed to be sold may redeem the property from the sale
by paying to the receiver by cashier's check or other form of
immediately available funds an amount equal to the greater of the
following:
(i) The sale price at which the property was sold;
(ii) An amount equal to the total of all liens upon the
property that were to be canceled as liens upon the property by
virtue of the sale, including all principal, interest, costs, and
other amounts secured by those liens through the date of payment
to the receiver.
(b) The amount determined under division (D)(8)(a)(i) or (ii)
of this section shall include interest on the amount of the sale
price at the rate of eight per cent per annum from the date of the
sale to the date of the payment of the full amount to the
receiver.
(c) Upon receipt of the amount determined under divisions
(D)(8)(a) and (b) of this section, the receiver shall advise the
court and all of the parties to whom notice was given pursuant to
division (D)(2)(b) of this section of the receipt of that amount
and shall set aside the sale. The fee title to the property shall
remain in the name of the owner of the property, and the liens
upon the property, except as provided in division (D)(3) of this
section, shall be transferred in the same order of priority to the
proceeds received by the receiver from the owner of the property.
(9) If the sale of the property by the receiver under
division (D)(2) of this section is conducted in accordance with
the terms of the order of the court authorizing the sale, upon
closing of the sale the receiver shall execute and deliver a
receiver's deed for the property sold to the purchaser. The
receiver's deed has the effect provided for in section 2329.37 of
the Revised Code.
(10) If the contemplated sale of the property is under
division (D)(2)(a)(ii) of this section, within ten days following
the delivery of the deed to the purchaser under division (D)(9) of
this section or as soon thereafter as is reasonably possible, the
receiver shall file with the court and serve upon all of the
parties to whom the notice of the application for the authority to
sell the property was given under division (D)(2)(b) of this
section a certificate and report of sale in which the receiver
certifies all of the following:
(a) That the sale was conducted in accordance with the order
authorizing the sale;
(b) The date of the sale;
(c) The name of the purchaser;
(e) The amount of the net proceeds of the sale after payment
of all expenses associated with the sale;
(f) A copy of the HUD-1 closing statement, if the HUD-1
closing statement was prepared;
(g) Any other information that the court may require.
Section 2. That existing sections 2333.22, 2715.21, 2735.01,
2735.02, and 2735.04 of the Revised Code are hereby repealed.
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