Bill Summary for S 364 (2019-2020)

Summary date: 

May 2 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
Senate Bill 364 (Public) Filed Tuesday, March 26, 2019
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.

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Bill 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. 

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