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Statutes Text

Article - Commercial Law




§24–304.

    (a)    A receiver may use receivership property other than in the ordinary course of business if:

        (1)    The receiver files a motion with the court to use receivership property other than in the course of ordinary business; and

        (2)    The court grants the motion.

    (b)    (1)    A receiver may transfer receivership property other than in the ordinary course of business by sale, lease, license, exchange, or other disposition of the receivership property if:

            (i)    The receiver files a motion with the court to transfer receivership property other than in the ordinary course of business; and

            (ii)    The court grants the motion.

        (2)    Subject to subsections (c) and (d) of this section, unless the agreement of sale provides otherwise, the court may order a sale under this section to be free and clear of a lien or other interest, including:

            (i)    The lien of a person that obtained appointment of the receiver;

            (ii)    Any subordinate lien;

            (iii)    Any right of redemption; or

            (iv)    Any other legal or equitable interest.

        (3)    A transfer under this subsection may occur by means other than a public auction sale.

    (c)    (1)    This subsection applies to a receivership under § 24–103(a)(1) of this title.

        (2)    A receiver may transfer receivership property under subsection (b) of this section free and clear of any lien of the person that obtained the appointment of the receiver and any senior lien only if in each case the receiver obtains the consent of the holder of the lien.

        (3)    A transfer under this subsection shall be subject to:

            (i)    If the receiver does not obtain the consent of the holder of the lien, any senior lien;

            (ii)    Any residential lease; and

            (iii)    Notwithstanding § 7–105.6(c) of the Real Property Article, any nonresidential lease that would not be terminated by a foreclosure sale of the lien of the person that obtained the appointment of the receiver.

    (d)    (1)    This subsection applies to a receivership under § 24–103(a)(2) or (3) of this title.

        (2)    A receiver may transfer receivership property under subsection (b) of this section free and clear of any lien only if:

            (i)    The receiver obtains the consent of:

                1.    The holder of any lien of the person that obtained the appointment of the receiver; and

                2.    The consent of any senior lienholder; or

            (ii)    The price at which the receivership property is to be sold is greater than the amount secured by any lien held by the person that obtained the appointment of the receiver, plus the amount of any senior lien.

        (3)    A transfer of receivership property may be free and clear of a nonresidential lease if the tenant of the nonresidential lease has the rights provided to the tenant under § 24–305(h)(2) of this title.

    (e)    (1)    This subsection applies to the sale or exchange of receivership property under subsection (b) of this section.

        (2)    Before filing a motion to sell or exchange receivership property, the receiver shall perform or obtain a complete search of the public records to determine the holders of liens and other interests in the receivership property.

        (3)    If the requested sale or exchange is for real property, the search shall:

            (i)    Cover a time period of at least 40 years immediately before the motion is filed; and

            (ii)    Be in accordance with generally accepted standards of title examination.

        (4)    The motion shall include an affidavit by the person making the search identifying the holders of liens and other interests.

        (5)    The receiver shall update the master service list based on the search to include any person not previously included.

        (6)    (i)    If the receiver receives actual notice at any time before the sale that there is a person holding a lien or other interest in the property who is not included on the master service list and whose identity and address are reasonably ascertainable, the receiver shall give notice of the time, place, and terms of sale to the person as promptly as reasonably practicable.

            (ii)    The notice may be given in any manner reasonably calculated to inform the person of the sale, including by telephone or electronic transmission.

    (f)    A lien or other interest in receivership property that is extinguished by a transfer under subsection (b) of this section attaches to the proceeds of the transfer with the same validity, perfection, and priority as the lien or other interest in the property immediately before the transfer, even if the proceeds are not sufficient to satisfy all obligations secured by the lien or other interest.

    (g)    A creditor holding a valid lien on the receivership property to be transferred may purchase the receivership property and offset against the purchase price all or part of the allowed amount secured by the lien if:

        (1)    The creditor tenders funds sufficient to satisfy in full the reasonable expenses of the transfer; and

        (2)    The obligation is secured by a senior lien that is extinguished by the transfer.

    (h)    (1)    (i)    Subject to subparagraph (ii) of this paragraph, this subsection applies to a reversal or modification of an order approving a transfer under subsection (b) of this section.

            (ii)    This subsection does not apply if the court stayed the order before the transfer.

        (2)    Regardless of whether a person knew before the transfer of the request for reversal or modification, a reversal or modification of an order approving a transfer does not:

            (i)    Affect the validity of the transfer to a person that acquired the receivership property in good faith; or

            (ii)    Revive against the person any lien or other interest extinguished by the transfer.