Truly Agreed, 2016

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SS HCS HB 1765, 2016    (New Section - Proposed Language)

515.645. 1. The receiver with the court's approval after notice and a hearing may use, sell, or lease estate property other than in the ordinary course of business.
     2. The court may order that a general receiver's sale of estate property either under subsection 1 of this section, or consisting of real property that the debtor intended to sell in its ordinary course of business, be effected free and clear of liens, claims, and of all rights of redemption, whether or not the sale will generate proceeds sufficient to fully satisfy all claims secured by the property, unless either:
     (1) The property to be sold is real property used principally in the production of crops, livestock, or aquaculture, or the property is a homestead, and the owner of the property has not consented to the sale following the appointment of the receiver; or
     (2) A party in interest, including but not limited to, an owner of the property to be sold or a secured creditor as regards to the property to be sold serves and files a timely opposition to the receiver's sale, and the court determines that the amount likely to be realized by the receiver's sale is less than the amount that may be realized within a reasonable time in the absence of the receiver's sale.

Upon any sale free and clear of liens authorized by this section, all liens encumbering the property sold shall transfer and attach to the proceeds of the sale, net of reasonable expenses incurred in the disposition of the property sold, in the same order, priority, and validity as the liens had with respect to the property sold immediately before the conveyance. The court may authorize the receiver at the time of sale to satisfy, in whole or in part, any lien on the property sold out of the proceeds of its sale if the interest of any other creditor having a lien against the proceeds of the sale would not thereby be impaired.
     3. At a public sale of estate property under subsection 1 of this section, a creditor with a lien against the property to be sold may credit bid at the sale of the property. A creditor with a lien against the property to be sold who purchases the property from a receiver may offset against the purchase price its secured claim against the property, provided that such secured creditor tenders cash sufficient to satisfy in full all secured claims payable out of the proceeds of sale having priority over such secured creditor's secured claim. If the lien or the claim it secures is the subject of a bona fide dispute, the court may order the holder of the lien or claim to provide the receiver with adequate security to assure full payment of the purchase price in the event the lien, the claim, or any part thereof is determined to be invalid or unenforceable.
     4. If estate property includes an interest as a co-owner of property, the receiver shall have the rights and powers of a co-owner afforded by applicable state or federal law, including but not limited to, any rights of partition.
     5. The reversal or modification on appeal of an authorization to sell or lease estate property under this section does not affect the validity of a sale or lease under that authorization to any person that purchased or leased the property in good faith, whether or not the person knew of the pendency of the appeal, unless the authorization and sale or lease were stayed pending the appeal.
     6. The notice of a proposed use, sale, or lease of estate property required by subsection 1 of this section shall include the time and place of any public sale, the terms and conditions of any private sale and the time fixed for filing objections, and shall be mailed to all parties in interest, and to such other persons as the court in the interests of justice may require.
     7. In determining whether a sale free and clear of liens, claims, encumbrances, and of all rights of redemption is in the best interest of the estate, the court may consider, among such other factors as the court deems appropriate, the following:
     (1) Whether the sale shall be conducted in a commercially reasonable manner considering assets of a similar type or nature;
     (2) Whether an independent appraisal supports the purchase price to be paid;
     (3) Whether creditors and parties in interest received adequate notice of the sale, sale procedures, and details of the proposed sale;
     (4) Any relationship between the buyer and the debtor;
     (5) Whether the sale is an arm's length transaction; and
     (6) Whether parties asserting a lien as to the property to be sold consent to the proposed sale.


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