Michigan’s Uniform Commercial Real Estate Receivership Act
This article first appeared in Michigan Lawyers Weekly.
How we got here from there: In May 2014, the Michigan Supreme Court amended Michigan Court Rules 2.621 and 2.622 governing the appointment of receivers and the orders appointing receivers. These amendments brought clarity to the duties and powers of receivers, the criteria for appointment as well as compensation. The receiver order now must include the following:
- Bonding amounts and requirements
- Identification of real and personal property of the receivership estate
- Procedures and standards related to the reasonable compensation of the receiver
- Reports required to be produced and filed by the receiver
- A description of the duties, authority and powers of the receiver
- A listing of property to be surrendered to the receiver
- Any other provision the court deems appropriate
The amendments set forth additional duties listed below to be included in the order:
- Within seven days after entry of the order of appointment, the receiver shall file an acceptance of receivership with the court and serve it on all parties.
- Within 28 days after the filing of the acceptance of appointment, the receiver shall provide notice of entry of the order of appointment to any person or entity having a recorded interest in all or any part of the receivership estate.
- The receiver shall file with the court an inventory of the property of the receivership estate within 35 days after entry of the order of appointment.
- The receiver shall account for all receipts, disbursements and distributions of money and property of the receivership estate.
- If there are sufficient funds to make a distribution to a class of creditors, the receiver may request that each creditor in the class of all creditors file a written proof of claim with the court. The receiver may contest the allowance of any claim.
- The receiver shall furnish information concerning the receivership estate and its administration as reasonably requested by any party to the action or proceeding.
- The receiver shall file with the court a final written report and final accounting of the administration of the receivership estate.
Finally, the receiver’s powers are set forth in the amendments and should be included in the order. These powers are:
- A receiver has general power to sue for and collect all debts, demands, and rents of the receivership estate, and to compromise or settle claims.
- A receiver may liquidate the personal property of the receivership estate and may sell real property of the receivership estate.
- A receiver may pay the ordinary expenses of the receivership but may not distribute the funds in the receivership estate to a party to the action without an order of the court.
- A receiver may only be discharged on order of the court.