AN ACT TO ENACT THE NORTH CAROLINA COMMERCIAL RECEIVERSHIP ACT; REPEAL CORRESPONDING ASSIGNMENTS FOR THE BENEFIT OF CREDITOR STATUTES; AND MAKE AN ACTION FOR THE APPOINTMENT OF A GENERAL RECEIVER FOR CERTAIN BUSINESS ENTITY DEBTORS A MANDATORY COMPLEX BUSINESS CASE, AS RECOMMENDED BY THE NORTH CAROLINA BAR ASSOCIATION. SL 2020-75. Enacted July 1, 2020. Effective January 1, 2021.
NC COMMERCIAL RECEIVERSHIP ACT REVISIONS. (NEW)
Printer-friendly: Click to view
View NCGA Bill Details | 2019-2020 Session |
AN ACT TO ENACT THE NORTH CAROLINA COMMERCIAL RECEIVERSHIP ACT; REPEAL CORRESPONDING ASSIGNMENTS FOR THE BENEFIT OF CREDITOR STATUTES; AND MAKE AN ACTION FOR THE APPOINTMENT OF A GENERAL RECEIVER FOR CERTAIN BUSINESS ENTITY DEBTORS A MANDATORY COMPLEX BUSINESS CASE, AS RECOMMENDED BY THE NORTH CAROLINA BAR ASSOCIATION.Intro. by Bishop.
SOG comments (2):
Long title change
House committee substitute to the 3rd edition changed the long title. Original title was AN ACT TO ENACT THE NORTH CAROLINA RECEIVERSHIP ACT; REPEAL ASSIGNMENTS FOR THE BENEFIT OF CREDITOR STATUTES; AND MAKE AN ACTION FOR THE APPOINTMENT OF A GENERAL RECEIVER FOR CERTAIN DEBTORS A MANDATORY COMPLEX BUSINESS CASE, AS RECOMMENDED BY THE NORTH CAROLINA BAR ASSOCIATION.
Bill History:
-
Tue, 26 Mar 2019 Senate: Filed
-
Tue, 26 Mar 2019 Senate: Filed
-
Wed, 27 Mar 2019 Senate: Passed 1st Reading
-
Wed, 27 Mar 2019 Senate: Ref To Com On Rules and Operations of the Senate
-
Wed, 27 Mar 2019 Senate: Withdrawn From Com
-
Wed, 27 Mar 2019 Senate: Passed 1st Reading
-
Wed, 27 Mar 2019 Senate: Ref To Com On Rules and Operations of the Senate
-
Wed, 27 Mar 2019 Senate: Withdrawn From Com
-
Tue, 16 Apr 2019 Senate: Reptd Fav Com Substitute
-
Tue, 16 Apr 2019 Senate: Com Substitute Adopted
-
Tue, 16 Apr 2019 Senate: Re-ref Com On Rules and Operations of the Senate
-
Tue, 16 Apr 2019 Senate: Reptd Fav Com Substitute
-
Tue, 16 Apr 2019 Senate: Com Substitute Adopted
-
Tue, 16 Apr 2019 Senate: Re-ref Com On Rules and Operations of the Senate
-
Wed, 1 May 2019 Senate: Reptd Fav
-
Wed, 1 May 2019 Senate: Reptd Fav
-
Thu, 2 May 2019 Senate: Amend Adopted A1
-
Thu, 2 May 2019 Senate: Passed 2nd Reading
-
Thu, 2 May 2019 Senate: Amend Adopted A2
-
Thu, 2 May 2019 Senate: Passed 3rd Reading
-
Thu, 2 May 2019 Senate: Engrossed
-
Thu, 2 May 2019 Senate: Amend Adopted A1
-
Thu, 2 May 2019 Senate: Passed 2nd Reading
-
Thu, 2 May 2019 Senate: Amend Adopted A2
-
Thu, 2 May 2019 Senate: Passed 3rd Reading
-
Thu, 2 May 2019 Senate: Engrossed
-
Mon, 6 May 2019 Senate: Regular Message Sent To House
-
Mon, 6 May 2019 House: Regular Message Received From Senate
-
Mon, 6 May 2019 Senate: Regular Message Sent To House
-
Mon, 6 May 2019 House: Regular Message Received From Senate
-
Tue, 7 May 2019 House: Passed 1st Reading
-
Tue, 7 May 2019 House: Passed 1st Reading
-
Thu, 25 Jun 2020 House: Reptd Fav Com Substitute
-
Thu, 25 Jun 2020 House: Cal Pursuant Rule 36(b)
-
Thu, 25 Jun 2020 House: Added to Calendar
-
Thu, 25 Jun 2020 House: Passed 2nd Reading
-
Thu, 25 Jun 2020 House: Passed 3rd Reading
-
Thu, 25 Jun 2020 House: Special Message Sent To Senate
-
Thu, 25 Jun 2020 Senate: Special Message Received For Concurrence in H Com Sub
-
Thu, 25 Jun 2020 Senate: Placed on Today's Calendar
-
Thu, 25 Jun 2020 Senate: Concurred In H Com Sub
-
Thu, 25 Jun 2020 Senate: Ordered Enrolled
-
Thu, 25 Jun 2020 Senate: Ratified
-
Thu, 25 Jun 2020 Senate: Pres. To Gov. 6/25/2020
-
Wed, 1 Jul 2020 Senate: Signed by Gov. 7/1/2020
-
Wed, 1 Jul 2020 Senate: Ch. SL 2020-75
Bill Summaries:
-
Bill S 364 (2019-2020)Summary date: Jul 2 2020 - View Summary
-
Bill S 364 (2019-2020)Summary date: Jun 25 2020 - View Summary
House committee substitute to the 3rd edition makes the following changes.
Amends long and short titles to limit the scope of the bill to commercial receivership (was, receivership).
Section 1
Amends the title of new GS Chapter 1, Article 38A to clarify that the article applies to commercial receivership. Makes conforming changes throughout.
Amends new GS 1-507.20(b) to add definitions of consumer debt and individual business debtor. Revises definition of court to provide that when a receiver is appointed to partition real property, the term refers to the clerk of superior court that has jurisdiction over the receiver and the receivership rather than the superior or district court in which the receivership is pending. Revises the definition of entity to mean a person other than an individual (was, a natural person) and makes conforming changes throughout. Revises the definition of property to include real property owned jointly by the debtor and the debtor’s spouse that is held by them as a tenancy by the entireties, unless the spouse is also a debtor in the receivership and there is joint debt owed to one or more creditors.
Further amends GS 1-507.20(b) to revise the definition of receivership property to exempt property of the debtor that is subject to an order issued pursuant to GS 1-362 (debtor’s property ordered sold), GS 1C-1601(a) (certain real and personal property of the debtor that the debtor or the debtor’s dependent uses as a residence or certain interests in a burial plot), GS 1C-1602 (personal property and homestead exemptions in Article X of the North Carolina Constitution), GS 25C-4 (for a debtor who is an art dealer, fine art on consignment with the debtor), GS 30-15 (allowance for a surviving spouse of a decedent/debtor), GS 30-17 (allowance for minor children of a decedent/debtor), and GS 135-9 (certain state retirement funds). These exemptions were previously included in GS 1-507.21. Exempts from receivership property in a general receivership of an individual business debtor, the principal residence of the business debtor or any consumer good if their value is less than the combined amount of all liens and rights of redemption and allowed claims of exemption in the residence or consumer good.
Revises GS 1-507.21, which addresses applicability of the new Article and of common law. Amends subsection (a) to clarify that the Article applies only to cases in which the debtor is an entity or an individual business debtor. Amends subsection (b), which identifies the exclusions from the Article, to include receiverships in which the receiver is appointed for a ward or a ward’s estate pursuant to GS 35A-1294, individuals other than individual business debtors and receiverships of those individuals. Adds new subsection (d) to provide that the Article does not interfere with the right to file a bankruptcy case pursuant to Title 11 of the US Code.
Revises GS 1-507.24(a) to provide that for an individual business debtor, a creditor to whom only consumer debt is owing may not file a civil action or motion for receivership.
Amends and expands subsection (b) to clarify authority related to debtors that are individual business debtors and entities. Also provides that a senior resident superior or district court judge may transfer jurisdiction and supervision of a receivership from one judge to another. Adds new subdivision (b)(2) to provide that when a receiver is appointed for an entity, the senior resident superior court judge must notify the Chief Justice, who then assigns the case to a judge. Until assigned, the judge who appointed the receiver retains jurisdiction. This subsection does not apply to an appointment of a receiver in a pending action to partition real property pursuant to GS 46A-28.
Revises subsection (c) to change the term “revenue producing potential” to “rents and profits”. Revises subsection (d) to clarify that it applies only when a receiver is appointed after a judgment (was, in a judgement, after a judgment, and when appointed on equitable grounds). Specifies that the receiver has the authority to dispose of property according to the judgment. Revises subsection (e) to provide that it applies to both entities and individual business debtors (was, entities). Revises subsection (h) to require 10 days’ notice prior to appointing a receiver.
Adds new subsection (k) to authorize the court to grant judgment against a party who files a motion to appoint a receiver in certain cases if the court denies the motion and determines, after notice and hearing, that the motion was filed in bad faith.
Revises GS 1-507.25 (c)(5) to clarify that, when a court is considering whether proposed receiver is independent, it can consider whether the proposed receiver has participated in any action that constitutes a violation of GS 23-46, which prohibits solicitation claims of creditors in proceedings.
Revises GS 1-507.28, which governs powers and duties of receivers, to add new subdivision (a)(5) to provide that GS 1-507.45 applies to a receiver’s authority to take possession of, use, control, manage, or transfer property that is subject to an exemption and therefore not totally receivership property. Revises subdivision (b)(6) to provide that the receiver has the authority to both manage and operate any business constituting receivership property (was, operate). Adds new subdivision (b)(9) to authorize a general receiver for an entity to file a bankruptcy case pursuant to Title 11 of the US Code. Revises subsection (d) to authorize the court to not only modify the receiver’s powers and duties but also limit them to such part of the property it determines will result in sufficient proceeds to pay allowed claims in full.
Revises GS 1-507.32(a) to provide that the court shall order (was, may order) the debtor or a general receiver to file schedules of property and claims within 60 days from the time of appointment.
Revises GS 1-507.34(b), which authorizes the court to require a receiver, including limited receivers, to file and update a master service list. Revises subsection (d) to clarify that service must comply with Rule 5 of the NC Rules of Civil Procedure.
Revises GS 1-507.35 to add new subsection (d), which requires the court to schedule status hearings on the receivership upon motion of the receiver, any party in interest, or when the court deems it appropriate. Notice must be provided to all persons on the master service list.
Revises GS 1-507.37(a), related to termination of a receivership. Adds provision governing termination of receivership of an individual business debtor if the court finds that the individual did not qualify to be a debtor.
Adds new GS 1-507.38A to establish a procedure for determining individual business debtor’s exempt property. Specifies that the provisions of GS 1C-1603 apply, except as provided in the Article and in the statute, including detailed requirements in subsections (1)-(3) related to service of notice on the individual business debtor of the debtor’s rights, the debtor’s right to request a hearing and file a statement, the right of the receiver or any party in interest to file an objection to the statement. Subsection (4) governs the forms and terminology that must be used for designating exempt property pursuant to this section, conduct of hearings, and valuations of property. Subsections (5)-(8) govern appeals of such orders, continuing enforceability of designations of exempt property made before a receiver is appointed, the process for amending the exemption designation for property acquired after the designation, and the application of the statute to a case of limited receivership.
Revises GS 1-507.39(b) to clarify that a creditor who has a lien or an interest in a debtor’s property (was, lien) may retain possession, custody, or control of the property in certain circumstances.
Revises GS 1-507.50(a)(2), regarding priority of claims, to clarify that the allowed fees and expenses incurred by the receiver includes any compensation advanced for the valuation of the debtor’s property. Adds new GS 1-507.50(d) to provide that proceeds of property owned by the debtor and the debtor’s spouse as tenants by the entirety may only be distributed to holders of unsecured claims owed jointly by both.
Makes technical and clarifying changes to GS 1-507.27(b), GS 1-507.29(b), GS 1-507.30(a)(2), GS 1-507.33, GS 1-507.34(f), GS 1-507.37(e), GS 1-507.42(f)(9), GS 1-507.44(a), GS 1-507.45(c), and GS 1-507.52(b).
Section 2
Repeals GS Chapter 1, Article 38, Part 2 (was, all of Article 38), which governs receivers of corporations.
Section 3
Revises changes to GS 7A-45.4, which governs designation of complex business cases, to clarify and conform the language to the revisions made to Article 38A and to increase the threshold for the debtor’s assets from two million to five million dollars to warrant designation as a complex business case if the debtor is not an individual business debtor.
Makes technical changes to Section 3(b).
Adds new provision amending GS 46A-28, which governs the court’s authority to make orders before final determination of a proceeding, to revise the language regarding appointment of receivers to specify the appointment of a limited receiver for the real property pursuant to GS Chapter 1, Article 38A (was, receivers).
Section 4
Revises the effective date to January 1, 2021 (was, January 1, 2020).
-
Bill S 364 (2019-2020)Summary date: May 2 2019 - View Summary
Senate amendments make the following changes to the 2nd edition.
Senate amendment #1 makes the following changes.
Amends proposed GS 1-507.24 regarding the appointment of receivers by a judge. Adds a new requirement for the clerk to provide a copy of the order appointing the receiver to the senior resident superior court judge or senior district judge for the court in which the receivership is pending. Removes the provision which limited appointment of a receiver for debtors other than individuals to a superior court judge. Now separately provides for procedures following appointment of receivers in either superior court or district court, and specifies that a designated superior court or district court judge is to retain jurisdiction and supervision of the receiver until the receivership is terminated and the receiver discharged.
Amends proposed GS 1-507.37 regarding termination of receiverships. Requires any surety bond posted by the receiver to be discharged and authorizes the clerk to return any cash bond deposited within 30 days, unless the discharging order provides otherwise.
Amends proposed GS 7A-45.4(a)(10) regarding mandatory complex business case designations. Now provides for a party to make the designation when an action involves a material issue related to an action in which the general receiver is sought to be appointed under GS 1-507.24, as enacted, for a debtor that is not an individual and has assets having a fair market value of no less than $2 million rather than $1 million. Further, requires the party making the designation under subdivision (10) to be either (1) the debtor or (2) one or more creditors or its duly authorized representatives, each asserting a claim against the debtor that is not contingent as to liability or the subject of a bona fide dispute as to liability or amount and that in the aggregate is in excess of $25,000. Provides for joinder of certain other creditors in the notice of designation, as specified.
Senate amendment #2 makes the following changes.
Adds to proposed GS 1-507.21, establishing that proposed Article 38A does not permit a receiver to seize a debtor's property interest that is exempt from the enforcement of creditor claims set forth in: GS 1-362 (debtor's property ordered sold), GS 1C-1601(a) (enumerated property exemptions), GS 1C-1602 (alternative exemptions), GS 25C-4 (exemption for art dealer's works of fine art on consignment with art dealer), GS 30-15 (exemption of surviving spouse year's allowance), and GS 135-9 (exemptions under the Teacher and State Employee Retirement System regarding garnishment or attachment).
Adds to proposed GS 1-507.25 to include consideration of whether a violation of GS 23-46 (soliciting claims of creditors in proceedings) occurred in the underlying action in determining a receiver's independence, in addition to the four previously specified considerations.
-
Bill S 364 (2019-2020)Summary date: Apr 16 2019 - View Summary
Senate committee substitute makes the following changes to the 1st edition.
Adds individual to the defined terms applicable to proposed Article 38A, NC Receivership Act, of GS Chapter 1.
Makes technical changes to the proposed changes to GS 7A-249 to correct the title of GS Chapter 57D.
-
Bill S 364 (2019-2020)Summary date: Mar 27 2019 - View Summary
Repeals GS Chapter 23, Articles 1 (Assignments for Benefit of Creditors) and 2 (Petition of Insolvent for Assignment for Creditors). Repeals GS Chapter 1, Article 38 (Receivers).
Enacts new Article 38A, North Carolina Receivership Act, in GS Chapter 1. Defines terms as they are used in the Article. The Article applies to receiverships pursuant to any provisions of the General Statutes as well as any receiverships instituted under common law and the equitable power of the law.
Excludes from the scope of the Article any receivership in which the receiver is a state agency or in which the receiver is appointed, controlled, or regulated by a state agency. Prohibits a trust other than a business trust and an estate of a deceased natural person, missing person, or absentee in military service from being a debtor in a receivership under the Article.
Gives the court appointing a receiver the exclusive authority to direct the receiver and determine all controversies relating to the receivership or receivership property, wherever it is located.
Allows a receivership to be either a limited receivership or a general receivership. Provides that if the order appointing the receiver does not specify the type, then the receivership is a limited receivership unless and until the court by later order designates otherwise. Allows the type of receivership to be converted by court order at any time.
Allows a receiver to be appointed by filing a civil action by a creditor or other party in interest in which the sole relief requested is the appointment of a receiver or is combined with, or is ancillary to, a civil action seeking a money judgment or other relief, or in the case of a limited receivership, is part of a power of sale or judicial foreclosure proceeding. Provides that the court may appoint a receiver in such an action with notice to the debtor, all other parties to the action, any judgment creditor who is seeking the appointment of a receiver in any other action, and other parties in interest and other persons as the court may require.
Allows a Superior Court or District Court judge to appoint a receiver for a debtor that is an individual; limits who may appoint one for all other debtors to a Superior Court judge. Allows a limited receiver to be appointed before judgment to protect a party that demonstrates an apparent right, title, or interest in property that is the subject of the action, if the property or its revenue-producing potential is being subjected to or is in danger of waste, loss, dissipation, or impairment, or has been or is about to be the subject of a voidable transaction. Allows a limited or general receiver to be appointed in a judgment or after judgment to carry the judgment into effect, to preserve nonexempt property pending an appeal, when an execution has been returned unsatisfied and the debtor refuses to apply the property in satisfaction of the judgment, or in an action for which a receiver may be appointed on equitable grounds. Also allows a receiver to be appointed when a person that is not a natural person meets any of the eight specified criteria, including that the person is insolvent, the person is in imminent danger of insolvency, or the person suspends its business for want of funds. Allows a limited receiver to be appointed, in like cases, of the property located within this state of foreign persons. Person is defined in the Article to include both natural persons and entities such as corporations, limited liability corporations, partnerships, and other entities recognized under state law.
Specifies that an order appointing a receiver does not create a trust.
Allows any person, regardless of residency, to service as a receiver as long as the court makes written conclusions based on the record that the person is qualified to serve as receiver and officer of the court and is independent as to any party in interest and the underlying dispute. Sets out information that the court must consider when determining a receiver’s qualifications and in determining whether a receiver is independent.
Requires a receiver to give bond, in the sum, nature, and with conditions determined by the court.
Provides that a receiver is entitled to all defenses and immunities provided by the state laws for an act or omission within the scope of the appointment. Prohibits suing a receiver personally for an act or omission in administering receivership property without the approval of the court that made the appointment. Allows a party or party in interest to conduct discovery of the receiver concerning any matter relating to the receiver's administration of the receivership property after obtaining an order authorizing the discovery.
Gives the receiver the power to: (1) take possession of, collect, control, manage, conserve, and protect receivership property with or without the assistance of the sheriff of the county in which the receivership property is located as reasonably necessary; (2) incur and pay expenses incidental to the receiver's exercise of the powers or otherwise in the performance of the receiver's duties; (3) assert rights, claims, causes of action, or defenses that relate to receivership property; and (4) seek and obtain instruction from the court with respect to any matter relating to the receivership property, the exercise of the receiver's powers, or the performance of the receiver's duties. Sets out nine additional powers that are given to a general receiver. Imposes upon a receiver the duties to: (1) act in conformity with the laws of this state and the rules and orders of the court; (2) avoid conflicts of interest; (3) not directly or indirectly pay or accept anything of value from receivership property that has not been disclosed and approved by the court; (4) not directly or indirectly purchase, acquire, or accept any interest in receivership property without full disclosure and approval by the court; (5) to otherwise act in the best interests of the receivership and the receivership property.
Give the receiver the powers and priority as if it were a creditor that obtained a judicial lien at the time of appointment on all of the receivership property, subject to satisfying the recording requirements as to real property that are described in the statute.
Assigns the debtor with the duties to (1) assist and cooperate fully with the receiver in the administration of the receivership and the receivership property and the discharge of the receiver's duties, and comply with all rules and orders of the court; (2) immediately upon the receiver's appointment, deliver to the receiver all of the receivership property in the debtor's possession, custody, or control; (3) supply to the receiver information as requested relating to the administration of the receivership and the receivership property; and (4) remain responsible for the filing of all tax returns. Sets out actions the court may take if a person knowingly fails to perform these duties.
Allows the receiver to employ professionals to assist in carrying out the receiver’s duties; sets out provisions governing such employment. Provides for compensation of the receiver and any professional retained from the receiver from the receivership property. Sets out facts and circumstances that the court is to consider when determining reasonable compensation.
Allows the court to order the debtor or general receiver to file within 60 days of appointment, or earlier, a schedule of (1) all receivership property and exempt property of the debtor, describing specified information about the property and (2) a schedule of all creditors and taxing authorities and regulatory authorities along with specified information about these entities and their claims.
Sets out notice requirements for general receiverships.
Sets out the process under which a party in interest may make an appearance in a receivership. Requires the receiver to periodically file an updated list containing contact information for the debtor, receiver, person joined as parties to the receivership, person known to have asserted a claim or an interest in any part of the receivership property, and all persons who have filed a notice of appearance.
Sets out requirements for service. Provides that where a provision in this Article, an order issued in the receivership, or a court rule requires an objection or other response to a motion or application within a specific time, and no objection or other response is interposed, the court may grant the relief requested without a hearing. Also provides that where a provision of this Article allows, as to administrative matters, or where it otherwise appears that no party in interest would be materially prejudiced, the court may issue an order ex parte or based on an application without a motion, notice, or hearing.
Sets out requirements the receiver must meet concerning the preparation and retention of records as well as interim reporting requirements that the court may order.
Provides conditions under which the court may remove a receiver, and provides for appointment of a successor.
Allows the court to discharge a receiver and terminate the receivership if the court finds that the appointment was improvident or that the circumstances no longer warrant continuation of the receivership. Allows assessing specified fees and damages against a person who sought a receiver’s appointment if the court finds that the appointment of the receiver was sought wrongfully or in bad faith. Requires the receiver to file a final report upon distribution or disposition of all receivership property or upon completion of the receiver’s duties and requires requesting that the court approve the final report and discharge the receiver. Sets out requirements for the final report.
Allows the receiver to sue in the receiver's capacity and allows the receiver to be sued in that capacity; sets out provisions governing venue, joinder, and the effect of judgments in such suits.
Sets out conditions under which a receiver can demand a person or debtor turn over property or owed debt to the receiver. Sets out the process for compelling the turnover of receivership property.
Allows a receiver to apply in a foreign jurisdiction for appointment as a receiver with respect to any receivership property located in a foreign jurisdiction. Sets out provisions governing foreign receivers seeing to obtain appointment by a court in this state with respect to property located in this state.
Gives the court appointing the receiver control and supervision over all receivership property and allows the court to order stays to protect the property and facilitate administration of the receivership. Provides that the entry of an order appointing a receiver operate as a stay, applicable to all persons, of an act, action, or proceeding: (1) to obtain possession of receivership property, or to interfere with or exercise control over receivership property, or enforce a judgment against receivership property, other than the commencement or continuation of a judicial, administrative, or other action or proceeding to enforce any lien having priority over the rights of the receiver in receivership property and (2) any act to create or perfect any lien against receivership property, except by exercise of a right of setoff, to the extent that the lien secures a claim that arose before the time of appointment. Sets out additional acts that are stayed by the entry of an order appointing a general receiver and sets out the duration of such stays. Sets out nine actions that are not stayed by the entry of an order appointing a receiver.
Sets out provisions governing the provision of utility services to receivership property.
Allows a receiver, without court order, to obtain unsecured credit and incur unsecured debt on behalf of the receivership. Sets out the process under which the receiver may be authorized by the court to obtain secured credit or incur secure indebtedness.
Allows a receiver, with court approval, to adopt or reject an executory contract of the debtor that is part of the receivership property. Sets out further provisions governing such contracts, including termination of executory contracts, assignments of executory contracts, actions that may be taken upon rejection of an executory contract for the sale of real property, and circumstances under which a receiver may not reject an unexpired lease of real property under which the debtor is the landlord.
Allows a receiver, with court approval, to use receivership property other than in the ordinary course of business. Allows the court to authorize the transfer of receivership property other than in the ordinary course of business by sale, lease, license, exchange, or other disposition. Allows the court to order that the receiver's sale of receivership property is free and clear of all liens and all rights of redemption and claims of exemption of the debtor, regardless of whether the sale will generate proceeds sufficient to satisfy fully all liens and claims of exemption on the receivership property, except when specified criteria are met. Sets out the timing for a secured party holding a lien and a debtor claiming an exemption in the receivership property to be sold that will not be paid in full from the proceeds of the proposed sale to file an objection to the receiver's motion. Sets out additional provisions governing the transfer of property.
Allows a receiver, with court approval, to abandon receivership property that is burdensome or not of material value to the receivership.
Sets out provisions governing a claims process. Allows a receiver of party in interest to file an objection to a claim. Provides the order of priority to be given claims.
Provides that the holder of each allowed unsecured claim is also entitled to interest to the extent that funds are available to pay in full the allowed unsecured claims.
Includes requirements for a distribution schedule and providing notice of the schedule.
Sets out limitations on the effect of a request by a secured party for the appointment of a receiver, the appointment of a receiver, or the application by a secured party of a receivership property to the secured obligation.
Amends GS 7A-45.4 by allowing an action in which a general receiver is sought to be appointed for a debtor that is not an individual and has assets with a fair market value of no less than $1 million to be designated as a mandatory complex business case. Require the notice of designation to be filed in such an instance by the debtor, any person with a lien on receivership property, or any creditor of the debtor.
Amends GS 57D-3-02 to provide that a person ceases to be a member of a limited liability company upon the execution of an assignment for the benefit of creditors under any applicable law or upon the appointment of a general receiver for the person.
Amends GS 23-38 to provide that an order of discharge under any Article of GS Chapter 23 (Debtor and Creditor) must declare that the debtor must be exempted from arrest or imprisonment on account of any judgment, or by reason of any debt due at the time of such order, or contracted for before that time though payable afterwards, except that (1) no debt, demand, judgment or decree against a debtor who is discharged will be affected or impaired by the discharge, but the same must remain valid and effective against all of the debtor’s property acquired after discharge and the appointment of a trustee, and the lien or any judgment or decree upon the debtor’s property must not in any manner be affected by the discharge and (2) the body of the debtor is free from arrest or imprisonment at the suit of every creditor, as to him only, to whom the notice required may have been given.
Amends GS 7A-249 by making conforming changes.
Applies to receiverships commenced on or after January 1, 2020.
-
Bill S 364 (2019-2020)Summary date: Mar 26 2019 - View Summary
To be summarized.
Identical to H 919, filed 4/16/19.