Background: A receiver is a person appointed by a court to take charge, as the court's own agent, over property of a party. A receivership is the means by which a court appoints a custodian over property pending litigation. In appropriate circumstances a receiver may be appointed over all of an entity's assets, and given the power to liquidate those assets for the general benefit of creditors. In other circumstances, a receiver may serve simply a caretaking role pending a creditor's action, such as a foreclosure.

In 2004 the Legislature enacted new receivership statutes. The rules generally governing receivership proceedings were consolidated into a single chapter, RCW 7.08, to clarify the powers, duties, and procedures applicable to receivers and receiverships. The frequency of receiverships has steadily increased since the financial crisis began in 2007. Receiverships, as a remedy, are more streamlined than federal bankruptcy proceedings and are less costly, yet proved a streamlined process for monetizing property for creditors. Practitioners in this area have proposed the following changes primarily to clarify ambiguities and address procedural issues that have been experienced since the 2004 statutes were enacted.

Summary: The time at which an action or proceeding for foreclosure or forfeiture is commenced for purposes of a provisional appointment of a receiver is clarified.

Courts are provided flexibility to lengthen or shorten time frames addressed in administering receiverships for good cause.

The amount of time a receiver is given to file a schedule A: a list of all known creditors and applicable regulatory and taxing agencies; their mailing addresses; the amount and nature of their claims, and whether their claims are disputed; and a schedule B: a list of all property of the estate, including liquidation value, and location of the real property; and a legal description of any real property, is increased from 20 to 35 days.

An additional automatic stay exception is created to permit a petitioning creditor who has commenced foreclosure proceedings to obtain appointment of a receiver without staying its own pending foreclosure.

The term "perishable property" is substituted with the term "property subject to eroding value" to expand the types of property covered.

The period in which to provide notice to creditors and other interested parties is increased from 20 to 30 days.

The number of days over which wages, salaries, or commissions including vacation, severance, and sick leave pay, or contributions to an employee benefit plan is increased from 90 days to 180 days. The dollar amount for allowed unsecured claims arising from consumer deposits for household purchases is increased $900 to $2425 to bring the amount in line with federal bankruptcy law.

A general receiver may sell real property free and clear of liens and all rights of redemption if the real property is of the type that the debtor would have sold in the ordinary course of business, whether or not the sale of the real property will generate proceeds sufficient to fully satisfy all claims secured by the property.

Senate	48	0
House	93	0