BILL REQ. #: Z-0817.5
| State of Washington | 58th Legislature | 2004 Regular Session |
Read first time 01/14/2004. Referred to Committee on Judiciary.
AN ACT Relating to receiverships; amending RCW 4.28.320, 6.32.100, 6.32.150, 7.08.010, 7.08.030, 7.56.110, 11.64.022, 23B.14.320, 24.06.305, 87.56.065, and 87.56.100; adding new sections to chapter 7.60 RCW; adding a new section to chapter 31.12 RCW; adding a new section to chapter 35.07 RCW; adding a new section to chapter 35A.15 RCW; creating new sections; and repealing RCW 4.28.081, 6.25.200, 6.32.290, 6.32.300, 6.32.310, 6.32.320, 6.32.330, 6.32.340, 6.32.350, 7.08.020, 7.08.050, 7.08.060, 7.08.070, 7.08.080, 7.08.090, 7.08.100, 7.08.110, 7.08.120, 7.08.130, 7.08.140, 7.08.150, 7.08.170, 7.08.180, 7.08.190, 7.08.200, 7.60.010, 7.60.020, 7.60.030, 7.60.040, 7.60.050, 23.72.010, 23.72.020, 23.72.030, 23.72.040, 23.72.050, 23.72.060, 24.03.275, 24.03.280, 24.03.285, 24.03.310, 24.03.315, 24.03.320, 87.56.070, 87.56.080, 87.56.085, 87.56.090, 87.56.110, 87.56.120, 87.56.130, 87.56.135, 87.56.140, 87.56.145, 87.56.150, and 87.56.155.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1
NEW SECTION. Sec. 2 A new section is added to chapter 7.60 RCW
to read as follows:
(1) "Court" means the superior court of this state in which the
receivership is pending.
(2) "Entity" means a person other than a natural person.
(3) "Estate" means the entirety of the property with respect to
which a receiver's appointment applies, but does not include property
of an individual person exempt from execution under the laws of this
state. Estate property includes any nonexempt interest in property
that is partially exempt, including fee title to property subject to a
homestead exemption under chapter 6.13 RCW.
(4) "Executory contract" means a contract where the obligation of
both the person over whose property the receiver is appointed and the
other party to the contract are so far unperformed that the failure of
either party to the contract to complete performance would constitute
a material breach of the contract, thereby excusing the other party's
performance of the contract.
(5) "Insolvent" or "insolvency" means a financial condition of a
person such that the sum of the person's debts and other obligations is
greater than all of that person's property, at a fair valuation,
exclusive of (a) property transferred, concealed, or removed with
intent to hinder, delay, or defraud any creditors of the person, and
(b) any property exempt from execution under any statutes of this
state.
(6) "Lien" means a charge against or interest in property to secure
payment of a debt or the performance of an obligation.
(7) "Notice and a hearing" or any similar phrase means the notice
and opportunity for a hearing as is appropriate in the particular
circumstances.
(8) "Person" means an individual, corporation, limited liability
company, general partnership, limited partnership, limited liability
partnership, association, governmental entity, or other entity, of any
kind or nature.
(9) "Property" includes all right, title, and interests, both legal
and equitable, and including any community property interest, in or
with respect to any property of a person with respect to which a
receiver is appointed, regardless of the manner by which the property
has been or is acquired. "Property" includes any proceeds, products,
offspring, rents, or profits of or from property in the estate.
"Property" does not include any power that a person may exercise solely
for the benefit of another person.
(10) "Receiver" means a person appointed by the court as the
court's agent, and subject to the court's direction, to take possession
of, manage, or dispose of property of a person.
(11) "Receivership" means the case in which the receiver is
appointed. "General receivership" means a receivership in which a
general receiver is appointed. "Custodial receivership" means a
receivership in which a custodial receiver is appointed.
(12) "Security interest" means a lien created by an agreement.
(13) "State agent" means any office, department, division, bureau,
board, commission, or other agency of the state of Washington or of any
subdivision thereof, or any individual acting in an official capacity
on behalf of any state agent.
(14) "Utility" means a person providing any service regulated by
the utilities and transportation commission.
NEW SECTION. Sec. 3 A new section is added to chapter 7.60 RCW
to read as follows:
NEW SECTION. Sec. 4 A new section is added to chapter 7.60 RCW
to read as follows:
(a) On application of any party, when the party is determined to
have a probable right to or interest in property that is a subject of
the action and in the possession of an adverse party, or when the
property or its revenue-producing potential is in danger of being lost
or materially injured or impaired. A receiver may be appointed under
this subsection (1)(a) whether or not the application for appointment
of a receiver is combined with, or is ancillary to, an action seeking
a money judgment or other relief;
(b) Provisionally, during the pendency of any action to foreclose
upon any lien against or for forfeiture of any interest in real or
personal property, or after notice of a trustee's sale has been given
under RCW 61.24.040, or after notice of forfeiture has been given under
RCW 61.30.040, on application of any person, when the interest in the
property that is the subject of foreclosure or forfeiture of the person
seeking the receiver's appointment is determined to be probable and
either:
(i) The property or its revenue-producing potential is in danger of
being lost or materially injured or impaired; or
(ii) The appointment of a receiver with respect to the real or
personal property that is the subject of the action, the notice of
trustee's sale or notice of forfeiture is provided for by agreement or
is reasonably necessary to effectuate or enforce an assignment of rents
or other revenues from the property;
(c) After judgment, in order to give effect to the judgment;
(d) To dispose of property according to provisions of a judgment
dealing with its disposition;
(e) To the extent that property is not exempt from execution, at
the instance of a judgment creditor either before or after the issuance
of any execution, to preserve or protect it, or prevent its transfer;
(f) If and to the extent that property is subject to execution to
satisfy a judgment, to preserve the property during the pendency of an
appeal, or when an execution has been returned unsatisfied, or when an
order requiring a judgment debtor to appear for proceedings
supplemental to judgment has been issued and the judgment debtor fails
to submit to examination as ordered;
(g) Upon an attachment of real or personal property when the
property attached is of a perishable nature or is otherwise in danger
of waste, impairment, or destruction, or where the abandoned property's
owner has absconded with, secreted, or abandoned the property, and it
is necessary to collect, conserve, manage, control, or protect it, or
to dispose of it promptly, or when the court determines that the nature
of the property or the exigency of the case otherwise provides cause
for the appointment of a receiver;
(h) In an action by a transferor of real or personal property to
avoid or rescind the transfer on the basis of fraud, or in an action to
subject property or a fund to the payment of a debt;
(i) In an action against any person who is not an individual if the
object of the action is the dissolution of that person, or if that
person has been dissolved, or if that person is insolvent or is not
generally paying the person's debts as those debts become due unless
they are the subject of bona fide dispute, or if that person is in
imminent danger of insolvency;
(j) In accordance with RCW 7.08.030 (4) and (6), in cases in which
a general assignment for the benefit of creditors has been made;
(k) In quo warranto proceedings under chapter 7.56 RCW;
(l) As provided under RCW 11.64.022;
(m) In an action by the department of licensing under RCW
18.35.220(3) with respect to persons engaged in the business of
dispensing of hearing aids, RCW 18.85.350 in the case of persons
engaged in the business of a real estate broker, associate real estate
broker, or real estate salesperson, or RCW 19.105.470 with respect to
persons engaged in the business of camping resorts;
(n) In an action under RCW 18.44.470 or 18.44.490 in the case of
persons engaged in the business of escrow agents;
(o) Upon a petition with respect to a nursing home in accordance
with and subject to receivership provisions under chapter 18.51 RCW;
(p) Under RCW 19.40.071(3), in connection with a proceeding for
relief with respect to a transfer fraudulent as to a creditor or
creditors;
(q) Under RCW 19.100.210(1), in an action by the attorney general
or director of financial institutions to restrain any actual or
threatened violation of the franchise investment protection act;
(r) In an action by the attorney general or by a prosecuting
attorney under RCW 19.110.160 with respect to a seller of business
opportunities;
(s) In an action by the director of financial institutions under
RCW 21.20.390 in cases involving actual or threatened violations of the
securities act of Washington or under RCW 21.30.120 in cases involving
actual or threatened violations of chapter 21.30 RCW with respect to
certain businesses and transactions involving commodities;
(t) In an action for dissolution of a business corporation under
RCW 23B.14.310 or 23B.14.320, for dissolution of a nonprofit
corporation under RCW 24.03.270, for dissolution of a mutual
corporation under RCW 24.06.305, or in any other action for the
dissolution or winding up of any other entity provided for by Title 23,
23B, 24, or 25 RCW;
(u) In any action in which the dissolution of any public or private
entity is sought, in any action involving any dispute with respect to
the ownership or governance of such an entity, or upon the application
of a person having an interest in such an entity when the appointment
is reasonably necessary to protect the property of the entity or its
business or other interests;
(v) Under RCW 25.05.215, in aid of a charging order with respect to
a partner's interest in a partnership;
(w) Under and subject to RCW 30.44.100, 30.44.270, and 30.56.030,
in the case of a bank or trust company or, under and subject to RCW
32.24.070 through 32.24.090, in the case of a mutual savings bank;
(x) On a temporary basis, under and subject to RCW 31.12.721, in
the case of credit unions;
(y) Upon the application of the director of financial institutions
under RCW 31.35.090 in actions to enforce chapter 31.35 RCW applicable
to agricultural lenders, under RCW 31.40.120 in actions to enforce
chapter 31.40 RCW applicable to entities engaged in federally
guaranteed small business loans, or under RCW 31.45.160 in actions to
enforce chapter 31.45 RCW applicable to persons licensed as check
cashers or check sellers;
(z) Under RCW 35.82.090 or 35.82.180, with respect to a housing
project;
(aa) Under RCW 39.84.160 or 43.180.360, in proceedings to enforce
rights under any revenue bonds issued for the purpose of financing
industrial development facilities or bonds of the Washington state
housing finance commission, or any financing document securing any such
bonds;
(bb) Under and subject to RCW 43.70.195, in an action by the
secretary of health or by a local health officer with respect to a
public water system;
(cc) Upon a petition by the Washington life and disability
insurance guaranty association under RCW 48.32A.060(7) for appointment
of the commissioner of insurance in the case of a domestic insurer;
(dd) Under RCW 48.46.130(3), in the case of a health maintenance
organization;
(ee) Under RCW 48.99.030, in proceedings ancillary to delinquency
proceedings involving an insurer not domiciled in this state;
(ff) As contemplated by RCW 61.24.030, with respect to real
property that is the subject of nonjudicial foreclosure proceedings
under chapter 61.24 RCW;
(gg) As contemplated by RCW 61.30.030(3), with respect to real
property that is the subject of judicial or nonjudicial forfeiture
proceedings under chapter 61.30 RCW;
(hh) Under RCW 64.32.200(2), in an action to foreclose upon a lien
for common expenses against a dwelling unit subject to the horizontal
property regimes act, chapter 64.32 RCW;
(ii) Under RCW 64.34.364(10), in an action by a unit owners'
association to foreclose a lien for nonpayment of delinquent
assessments against condominium units;
(jj) Upon application of the attorney general under RCW
64.36.220(3), in aid of any writ or order restraining or enjoining
violations of chapter 64.36 RCW applicable to timeshares;
(kk) Under RCW 70.95A.050(3), in aid of the enforcement of payment
or performance of municipal bonds issued with respect to facilities
used to abate, control, or prevent pollution;
(ll) Upon the application of the department of social and health
services under RCW 74.42.580, in cases involving nursing homes;
(mm) Upon the application of the utilities and transportation
commission under RCW 80.28.040, with respect to a water company that
has failed to comply with an order of such commission within the time
deadline specified therein;
(oo) Under RCW 87.56.065, in connection with the dissolution of an
irrigation district;
(pp) Upon application of the attorney general or the department of
licensing, in any proceeding that either of them are authorized by
statute to bring to enforce Title 18 or 19 RCW; the securities act of
Washington, chapter 21.20 RCW; the Washington commodities act, chapter
21.30 RCW; the land development act, chapter 58.19 RCW; or under
chapter 64.36 RCW relating to the regulation of timeshares;
(qq) Upon application of the director of financial institutions in
any proceeding that the director of financial institutions is
authorized to bring to enforce chapters 31.35, 31.40, and 31.45 RCW; or
(rr) In such other cases as may be provided for by law, or when, in
the discretion of the court, it may be necessary to secure ample
justice to the parties.
(2) The superior courts of this state shall appoint as receiver of
property located in this state a person who has been appointed by a
federal or state court located elsewhere as receiver with respect to
the property specifically or with respect to the owner's property
generally, upon the application of the person or of any party to that
foreign proceeding, and following the appointment shall give effect to
orders, judgments, and decrees of the foreign court affecting the
property in this state held by the receiver, unless the court
determines that to do so would be manifestly unjust or inequitable.
The venue of such a proceeding may be any county in which the person
resides or maintains any office, or any county in which any property
over which the receiver is to be appointed is located at the time the
proceeding is commenced.
(3) At least seven days' notice of any application for the
appointment of a receiver shall be given to the owner of property to be
subject thereto and to all other parties in the action, and to other
parties in interest as the court may require. If any execution by a
judgment creditor under Title 6 RCW or any application by a judgment
creditor for the appointment of a receiver, with respect to property
over which the receiver's appointment is sought, is pending in any
other action at the time the application is made, then notice of the
application for the receiver's appointment also shall be given to the
judgment creditor in the other action. The court may shorten or expand
the period for notice of an application for the appointment of a
receiver upon good cause shown.
(4) The order appointing a receiver in all cases shall reasonably
describe the property over which the receiver is to take charge, by
category, individual items, or both if the receiver is to take charge
of less than all of the owner's property. If the order appointing a
receiver does not expressly limit the receiver's authority to
designated property or categories of property of the owner, the
receiver is a general receiver with the authority to take charge over
all of the owner's property, wherever located.
(5) The court may condition the appointment of a receiver upon the
giving of security by the person seeking the receiver's appointment, in
such amount as the court may specify, for the payment of costs and
damages incurred or suffered by any person should it later be
determined that the appointment of the receiver was wrongfully
obtained.
NEW SECTION. Sec. 5 A new section is added to chapter 7.60 RCW
to read as follows:
(1) Has been convicted of a felony or other crime involving moral
turpitude or is controlled by a person who has been convicted of a
felony or other crime involving moral turpitude;
(2) Is a party to the action, or is a parent, grandparent, child,
grandchild, sibling, partner, director, officer, agent, attorney,
employee, secured or unsecured creditor or lienor of, or holder of any
equity interest in, or controls or is controlled by, the person whose
property is to be held by the receiver, or who is the agent or attorney
of any disqualified person;
(3) Has an interest materially adverse to the interest of persons
to be affected by the receivership generally; or
(4) Is the sheriff of any county.
NEW SECTION. Sec. 6 A new section is added to chapter 7.60 RCW
to read as follows:
[Case Caption]
KNOW ALL BY THESE PRESENTS, that . . . . . . . . , as Principal, and . . . . . . . . , as Surety, are held and firmly bound in the amount of . . . . . . . . Dollars ($. . . . . . . . ) for the faithful performance by Principal of the Principal's duties as receiver with respect to property of . . . . . . . . in accordance with order(s) of such court previously or hereafter entered in the above-captioned proceeding. If the Principal faithfully discharges the duties of receiver in accordance with such orders, this obligation shall be void, but otherwise it will remain in full force and effect.
NEW SECTION. Sec. 7 A new section is added to chapter 7.60 RCW
to read as follows:
NEW SECTION. Sec. 8 A new section is added to chapter 7.60 RCW
to read as follows:
(a) The power to incur or pay expenses incidental to the receiver's
preservation and use of the property with respect to which the
appointment applies, and otherwise in the performance of the receiver's
duties, including the power to pay obligations incurred prior to the
receiver's appointment if and to the extent that payment is determined
by the receiver to be prudent in order to preserve the value of
property in the receiver's possession and the funds used for this
purpose are not subject to any lien or right of setoff in favor of a
creditor who has not consented to the payment and whose interest is not
otherwise adequately protected;
(b) If the appointment applies to all or substantially all of the
property of an operating business or any revenue-producing property of
any person, to do all things which the owner of the business or
property might do in the ordinary course of the operation of the
business as a going concern or use of the property including, but not
limited to, the purchase and sale of goods or services in the ordinary
course of such business, and the incurring and payment of expenses of
the business or property in the ordinary course;
(c) The power to assert any rights, claims, or choses in action of
the person over whose property the receiver is appointed relating
thereto, if and to the extent that the claims are themselves property
within the scope of the appointment or relate to any property, to
maintain in the receiver's name or in the name of such a person any
action to enforce any right, claim, or chose in action, and to
intervene in actions in which the person over whose property the
receiver is appointed is a party for the purpose of exercising the
powers under this subsection (1)(c);
(d) The power to intervene in any action in which a claim is
asserted against the person over whose property the receiver is
appointed relating thereto, for the purpose of prosecuting or defending
the claim and requesting the transfer of venue of the action to the
court. This power is exercisable with court approval in the case of a
liquidating receiver, and with or without court approval in the case of
a general receiver;
(e) The power to assert rights, claims, or choses in action of the
receiver arising out of transactions in which the receiver is a
participant;
(f) The power to pursue in the name of the receiver any claim under
chapter 19.40 RCW assertable by any creditor of the person over whose
property the receiver is appointed, if pursuit of the claim is
determined by the receiver to be appropriate;
(g) The power to seek and obtain advice or instruction from the
court with respect to any course of action with respect to which the
receiver is uncertain in the exercise of the receiver's powers or the
discharge of the receiver's duties;
(h) The power to obtain appraisals with respect to property in the
hands of the receiver;
(i) The power by subpoena to compel any person to submit to an
examination under oath, in the manner of a deposition in a civil case,
with respect to estate property or any other matter that may affect the
administration of the receivership; and
(j) Other powers as may be conferred upon the receiver by the court
or otherwise by statute or rule.
(2) A receiver has the following duties in addition to those
specifically conferred by this chapter or otherwise by statute or court
rule:
(a) The duty to notify all federal and state taxing authorities of
the receiver's appointment in accordance with any applicable laws
imposing this duty, including but not limited to 26 U.S.C. Sec. 6036
and RCW 51.14.073, 51.16.160, and 82.32.240, or any successor statutes;
(b) If the receiver is appointed with respect to any real property,
the duty to file with the auditor of the county in which the real
property is located, or the registrar of lands in accordance with RCW
65.12.600 in the case of registered lands, a certified copy of the
order of appointment, together with a legal description of the real
property if one is not included in that order; and
(c) Other duties as the receiver may be directed to perform by the
court or as may be provided for by statute or rule.
(3) The various powers and duties of a receiver provided for by
this chapter may be expanded, modified, or limited by order of the
court for good cause shown.
NEW SECTION. Sec. 9 A new section is added to chapter 7.60 RCW
to read as follows:
NEW SECTION. Sec. 10 A new section is added to chapter 7.60 RCW
to read as follows:
(2) Supply to the receiver information necessary to enable the
receiver to complete any schedules that the receiver may be required to
file under section 11 of this act, and otherwise assist the receiver in
the completion of the schedules;
(3) Upon the receiver's appointment, deliver into the receiver's
possession all of the property of the estate in the person's
possession, custody, or control, including, but not limited to, all
accounts, books, papers, records, and other documents; and
(4) Following the receiver's appointment, submit to examination by
the receiver, or by any other person upon order of the court, under
oath, concerning the acts, conduct, property, liabilities, and
financial condition of that person or any matter relating to the
receiver's administration of the estate.
When the person over whose property the receiver is appointed is an
entity, each of the officers, directors, managers, members, partners,
or other individuals exercising or having the power to exercise control
over the affairs of the entity are subject to the requirements of this
section.
NEW SECTION. Sec. 11 A new section is added to chapter 7.60 RCW
to read as follows:
(2) In all other cases, within twenty days after the date of
appointment of a general receiver, the receiver shall file as schedule
A a true list of all of the known creditors of the person over whose
assets the receiver is appointed, their mailing addresses, the amount
and nature of their claims, and whether their claims are disputed; and
as schedule B a true list of all property of the estate identifiable by
the receiver, including the estimated liquidation value and location of
the property and, if real property, a legal description thereof, as of
the date of appointment of the receiver.
(3) The schedules must be in substantially the following forms:
| SCHEDULE A--CREDITOR LIST | |||||
| 1. List all creditors having security interests or liens, showing: | |||||
| Name | Address | Amount | Collateral | Whether or not disputed | |
| 2. List all wages, salaries, commissions, or contributions to an employee benefit plan owed, showing: | |||||
| Name | Address | Amount | Whether or not disputed | ||
| 3. List all consumer deposits owed, showing: | |||||
| Name | Address | Amount | Whether or not disputed | ||
| 4. List all taxes owed, showing: | |||||
| Name | Address | Amount | Whether or not disputed | ||
| 5. List all unsecured claims, showing: | |||||
| Name | Address | Amount | Whether or not disputed | ||
| 6. List all owners or shareholders, showing: | |||||
| Name | Address | Percentage of Ownership | |||
SCHEDULE B--LIST OF PROPERTY | |||||
| List each category of property and for each give approximate value obtainable for the asset on the date of assignment/appointment of the receiver, and address where asset is located. | |||||
I. Nonexempt Property | |||||
| Description
and Location | Liquidation Value on Date of
Assignment/Appointment of Receiver | ||||
| 1. | Legal Description and street address of real property, including leasehold interests: | ||||
| 2. | Fixtures: | ||||
| 3. | Cash and bank accounts: | ||||
| 4. | Inventory: | ||||
| 5. | Accounts receivable: | ||||
| 6. | Equipment: | ||||
| 7. | Prepaid expenses, including deposits, insurance, rents, and utilities: | ||||
| 8. | Other, including loans to third parties, claims, and choses in action: | ||||
II. Exempt Property | |||||
| Description
and Location | Liquidation Value on Date of
Assignment/Appointment of Receiver | ||||
I DECLARE under penalty of perjury under the laws of the state of Washington that the foregoing is true, correct, and complete to the best of my knowledge. DATED this . . . day of . . . . . . . . , . . . ., at . . . . . . . . , state of . . . . . . . . . | |||||
| . . . . . . . . . . . . . . . . . . . . . . . . [SIGNATURE] | |||||
NEW SECTION. Sec. 12 A new section is added to chapter 7.60 RCW
to read as follows:
(1) A balance sheet;
(2) A statement of income and expenses;
(3) A statement of cash receipts and disbursements;
(4) A statement of accrued accounts receivable of the receiver.
The statement shall disclose amounts considered to be uncollectable;
(5) A statement of accounts payable of the receiver, including
professional fees. The statement shall list the name of each creditor
and the amounts owing and remaining unpaid over thirty days; and
(6) A tax disclosure statement, which shall list postfiling taxes
due or tax deposits required, the name of the taxing agency, the amount
due, the date due, and an explanation for any failure to make payments
or deposits.
A custodial receiver shall file with the court all such reports the
court may require.
NEW SECTION. Sec. 13 A new section is added to chapter 7.60 RCW
to read as follows:
(a) The commencement or continuation, including the issuance or
employment of process, of a judicial, administrative, or other action
or proceeding against the person over whose property the receiver is
appointed that was or could have been commenced before the entry of the
order of appointment, or to recover a claim against the person that
arose before the entry of the order of appointment;
(b) The enforcement, against the person over whose property the
receiver is appointed or any estate property, of a judgment obtained
before the order of appointment;
(c) Any act to obtain possession of estate property from the
receiver, or to interfere with, or exercise control over, estate
property;
(d) Any act to create, perfect, or enforce any lien or claim
against estate property except by exercise of a right of setoff, to the
extent that the lien secures a claim against the person that arose
before the entry of the order of appointment; or
(e) Any act to collect, assess, or recover a claim against the
person that arose before the entry of the order of appointment.
(2) The stay shall automatically expire as to the acts specified in
subsection (1)(a), (b), and (e) of this section sixty days after the
entry of the order of appointment unless before the expiration of the
sixty-day period the receiver, for good cause shown, obtains an order
of the court extending the stay, after notice and a hearing. A person
whose action or proceeding is stayed by motion to the court may seek
relief from the stay for good cause shown. Any judgment obtained
against the person over whose property the receiver is appointed or
estate property following the entry of the order of appointment is not
a lien against estate property unless the receivership is terminated
prior to a conveyance of the property against which the judgment would
otherwise constitute a lien.
(3) The entry of an order appointing a receiver does not operate as
a stay of:
(a) The commencement or continuation of a criminal proceeding
against the person over whose property the receiver is appointed;
(b) The commencement or continuation of an action or proceeding to
establish paternity, or to establish or modify an order for alimony,
maintenance, or support, or to collect alimony, maintenance, or support
under any order of a court;
(c) Any act to perfect, or to maintain or continue the perfection
of, an interest in estate property if the interest perfected would be
effective against a creditor of the person over whose property the
receiver is appointed holding at the time of the entry of the order of
appointment either a perfected nonpurchase money security interest
under chapter 62A.9A RCW against the property involved, or a lien by
attachment, levy, or the like, whether or not such a creditor exists.
If perfection of an interest would require seizure of the property
involved or the commencement of an action, the perfection shall instead
be accomplished by filing, and by serving upon the receiver, or
receiver's counsel, if any, notice of the interest within the time
fixed by law for seizure or commencement;
(d) The commencement or continuation of an action or proceeding by
a governmental unit to enforce its police or regulatory power;
(e) The enforcement of a judgment, other than a money judgment,
obtained in an action or proceeding by a governmental unit to enforce
its police or regulatory power, or with respect to any licensure of the
person over whose property the receiver is appointed;
(f) The exercise of a right of setoff, including but not limited to
(i) any right of a commodity broker, forward contract merchant,
stockbroker, financial institution, or securities clearing agency to
set off a claim for a margin payment or settlement payment arising out
of a commodity contract, forward contract, or securities contract
against cash, securities, or other property held or due from the
commodity broker, forward contract merchant, stockbroker, financial
institution, or securities clearing agency to margin, guarantee,
secure, or settle the commodity contract, forward contract, or
securities contract, and (ii) any right of a swap participant to set
off a claim for a payment due to the swap participant under or in
connection with a swap agreement against any payment due from the swap
participant under or in connection with the swap agreement or against
cash, securities, or other property of the debtor held by or due from
the swap participant to guarantee, secure, or settle the swap
agreement; or
(g) The issuance by a governmental unit of a notice of a tax
deficiency.
NEW SECTION. Sec. 14 A new section is added to chapter 7.60 RCW
to read as follows:
NEW SECTION. Sec. 15 A new section is added to chapter 7.60 RCW
to read as follows:
(2) Any obligation or liability incurred by a general receiver on
account of the receiver's assumption of an executory contract or
unexpired lease shall be treated as an expense of the receivership. A
general receiver's rejection of an executory contract or unexpired
lease shall be treated as a breach of the contract or lease occurring
immediately prior to the receiver's appointment; and the receiver's
right to possess or use property pursuant to any executory contract or
lease shall terminate upon rejection of the contract or lease. The
other party to an executory contract or unexpired lease that is
rejected by a general receiver may take such steps as may be necessary
under applicable law to terminate or cancel the contract or lease. The
claim of a party to an executory contract or unexpired lease resulting
from a general receiver's rejection of it shall be served upon the
receiver in the manner provided for by section 23 of this act within
thirty days following the rejection.
(3) A general receiver's power under this section to assume an
executory contract or unexpired lease shall not be affected by any
provision in the contract or lease that would effect or permit a
forfeiture, modification, or termination of it on account of either the
receiver's appointment, the financial condition of the person over
whose property the receiver is appointed, or an assignment for the
benefit of creditors by that person.
(4) A general receiver may not assume an executory contract or
unexpired lease of the person over whose property the receiver is
appointed without the consent of the other party to the contract or
lease if:
(a) Applicable law would excuse a party, other than the person over
whose property the receiver is appointed, from accepting performance
from or rendering performance to anyone other than the person even in
the absence of any provisions in the contract or lease expressly
restricting or prohibiting an assignment of the person's rights or the
performance of the person's duties;
(b) The contract or lease is a contract to make a loan or extend
credit or financial accommodations to or for the benefit of the person
over whose property the receiver is appointed, or to issue a security
of the person; or
(c) The executory contract or lease expires by its own terms, or
under applicable law prior to the receiver's assumption thereof.
(5) A receiver may not assign an executory contract or unexpired
lease without assuming it, absent the consent of the other parties to
the contract or lease.
(6) If the receiver rejects an executory contract or unexpired
lease for:
(a) The sale of real property under which the person over whose
property the receiver is appointed is the seller and the purchaser is
in possession of the real property;
(b) The sale of a real property timeshare interest under which the
person over whose property the receiver is appointed is the seller;
(c) The license of intellectual property rights under which the
person over whose property the receiver is appointed is the licensor;
or
(d) The lease of real property in which the person over whose
property the receiver is appointed is the lessor;
then the purchaser, licensee, or lessee may treat the rejection as a
termination of the contract, license agreement, or lease, or
alternatively, the purchaser, licensee, or lessee may remain in
possession in which case the purchaser, licensee, or lessee shall
continue to perform all obligations arising thereunder as and when they
may fall due, but may offset against any payments any damages occurring
on account of the rejection after it occurs. The purchaser of real
property in such a case is entitled to receive from the receiver any
deed or any other instrument of conveyance which the person over whose
property the receiver is appointed is obligated to deliver under the
executory contract when the purchaser becomes entitled to receive it,
and the deed or instrument has the same force and effect as if given by
the person. A purchaser, licensee, or lessee who elects to remain in
possession under the terms of this subsection has no rights against the
receiver on account of any damages arising from the receiver's
rejection except as expressly provided for by this subsection. A
purchaser of real property who elects to treat rejection of an
executory contract as a termination has a lien against the interest in
that real property of the person over whose property the receiver is
appointed for the recovery of any portion of the purchase price that
the purchaser has paid.
NEW SECTION. Sec. 16 A new section is added to chapter 7.60 RCW
to read as follows:
(2) The court, after notice and a hearing, may authorize a receiver
to obtain credit or incur indebtedness other than in the ordinary
course of business. The court may allow the receiver to mortgage,
pledge, hypothecate, or otherwise encumber estate property as security
for repayment of any indebtedness that the receiver may incur.
NEW SECTION. Sec. 17 A new section is added to chapter 7.60 RCW
to read as follows:
NEW SECTION. Sec. 18 A new section is added to chapter 7.60 RCW
to read as follows:
(2) Litigation by or against a receiver is adjunct to the
receivership case. The clerk of the court shall assign a cause number
that reflects the relationship of any litigation to the receivership
case. All pleadings in adjunct litigation shall include the cause
number of the receivership case as well as the adjunct litigation
number assigned by the clerk of the court. All adjunct litigation
shall be referred to the judge, if any, assigned to the receivership
case.
(3) The receiver may be joined or substituted as a party in any
suit or proceeding that was pending at the time of the receiver's
appointment and in which the person over whose property the receiver is
appointed is a party, upon application by the receiver to the court or
agency before which the action is pending.
(4) Venue for adjunct litigation by or against the receiver shall
lie in the court in which the receivership is pending, if the courts of
this state have jurisdiction over the cause. Actions in other courts
in this state shall be transferred to the court upon the receiver's
filing of a motion for change of venue, provided that the receiver
files the motion within thirty days following service of original
process upon the receiver.
(5) Action by or against a receiver does not abate by reason of
death or resignation of the receiver, but continues against the
successor receiver or against the entity in receivership, if a
successor receiver is not appointed.
(6) Whenever the assets of any domestic or foreign corporation,
that has been doing business in this state, has been placed in the
hands of any general receiver and the receiver is in possession of its
assets, service of all process upon the corporation may be made upon
the receiver.
(7) A judgment against a general receiver is not a lien on the
property or funds of the receivership, nor shall any execution issue
thereon, but upon entry of the judgment in the court in which a general
receivership is pending, or upon filing in a general receivership of a
certified copy of the judgment from another jurisdiction, the judgment
shall be treated as an allowed claim in the receivership. A judgment
against a custodial receiver shall be treated and has the same effect
as a judgment against the person over whose property the receiver is
appointed, except that the judgment is not enforceable against estate
property unless otherwise ordered by the court upon notice and a
hearing.
NEW SECTION. Sec. 19 A new section is added to chapter 7.60 RCW
to read as follows:
(2) The receiver has no personal liability to a person other than
the person over whose property the receiver is appointed or its record
or beneficial owners for any loss or damage occasioned by the
receiver's performance of the duties imposed by the appointment, or out
of the receiver's authorized operation of any business of a person,
except loss or damage occasioned by fraud on the part of the receiver,
by acts intended by the receiver to cause loss or damage to the
specific claimant, or by acts or omissions for which an officer of a
business corporation organized and existing under the laws of this
state are liable to the claimant under the same circumstances.
(3) Notwithstanding subsections (1) and (2) of this section, a
receiver has no personal liability to any person for acts or omissions
of the receiver specifically contemplated by any order of the court.
(4) A person other than a successor receiver duly appointed by the
court does not have a right of action against a receiver under this
section to recover property or the value thereof for or on behalf of
the estate.
NEW SECTION. Sec. 20 A new section is added to chapter 7.60 RCW
to read as follows:
(2) A person is not disqualified for employment under this section
solely because of the person's employment by, representation of, or
other relationship with a creditor or other party in interest, if the
relationship is disclosed in the application for the person's
employment and if the court determines that there is no actual conflict
of interest.
(3) This section does not preclude the court from authorizing the
receiver to act as attorney or accountant if the authorization is in
the best interests of the estate.
(4) The receiver, and any professionals employed by the receiver,
is permitted to file an itemized billing statement with the court
indicating both the time spent, billing rates of all who perform work
to be compensated, and a detailed list of expenses and serve copies on
any person who has been joined as a party in the action, or any person
requesting the same, advising that unless objections are filed with the
court, the receiver may make the payments specified in the notice. If
an objection is filed, the receiver or professional whose compensation
is affected may request the court to hold a hearing on the objection on
five days' notice to the persons who have filed objections. If the
receiver is a custodial receiver appointed in aid of foreclosure,
payment of fees and expenses may be allowed upon the stipulation of any
creditor holding a security interest in the property for whose benefit
the receiver is appointed.
NEW SECTION. Sec. 21 A new section is added to chapter 7.60 RCW
to read as follows:
(2) Any person having a claim against or interest in any estate
property or in the receivership proceedings may appear in the
receivership, either in person or by an attorney. Appearance must be
made by filing a written notice of appearance, including the name and
mailing address of the party in interest, and the name and address of
the person's attorney, if any, with the clerk, and by serving a copy of
the notice upon the receiver and the receiver's attorney of record, if
any. The receiver shall maintain a master mailing list of all persons
joined as parties in the receivership and of all persons serving and
filing notices of appearance in the receivership in accordance with
this section. A creditor or other party in interest has a right to be
heard with respect to all matters affecting the person, whether or not
the person is joined as a party to the action.
(3) Orders of the court with respect to the treatment of claims and
disposition of estate property, including but not limited to orders
providing for sales of property free and clear of liens, are effective
as to any person having a claim against or interest in the receivership
estate and who has actual knowledge of the receivership, whether or not
the person receives written notice from the receiver and whether or not
the person appears or participates in the receivership.
(4) The receiver shall give not less than ten days' written notice
by mail of any examination by the receiver of the person with respect
to whose property the receiver has been appointed and to persons who
serve and file an appearance in the proceeding.
(5) Persons on the master mailing list are entitled to not less
than twenty days' written notice of the hearing of any motion or other
proceeding involving any proposed:
(a) Allowance or disallowance of any claim or claims;
(b) Abandonment, disposition, or distribution of estate property,
other than an emergency disposition of perishable property or a
disposition of property in the ordinary course of business;
(c) Compromise or settlement of a controversy that might affect the
distribution to creditors from the estate;
(d) Compensation of the receiver or any professional employed by
the receiver; or
(e) Application for discharge of the receiver and exoneration of
the receiver's bond.
Any opposition to any motion to authorize any of the actions under
(a) through (e) of this subsection must be filed and served upon the
receiver and the receiver's attorney, if any, at least three days
before the date of the proposed action. Persons on the master mailing
list shall be served with all pleadings or in opposition to any motion.
The court may require notice to be given to persons on the master
mailing list of additional matters the court deems appropriate, and may
enlarge or reduce any time period provided for by this section for good
cause shown. The receiver shall make a copy of the current master
mailing list available to any person on that list upon the person's
request.
(6) All persons duly notified by the receiver of any hearing to
approve or authorize an action or a proposed action by the receiver is
bound by any order of the court with respect to the action, whether or
not the persons have appeared or objected to the action or proposed
action or have been joined formally as parties to the particular
action.
(7) Whenever notice is not specifically required to be given under
this chapter, the court may consider motions and grant or deny relief
without notice or hearing, if it appears that no person joined as a
party or who has appeared in the receivership would be prejudiced or
harmed by the relief requested.
NEW SECTION. Sec. 22 A new section is added to chapter 7.60 RCW
to read as follows:
(2) The notice of the receivership shall be in substantially the
following form:
| IN THE SUPERIOR COURT, IN AND FOR COUNTY, WASHINGTON | |||
| [Case Name] | ) | Case No. | |
| ) | |||
| ) | NOTICE OF RECEIVERSHIP | ||
| ) | |||
| ) | |||
| ) | |||
| TO CREDITORS AND OTHER PARTIES IN INTEREST: | |||
| PLEASE TAKE NOTICE that a receiver was appointed for , whose last known address is , on , . | |||
| YOU ARE HEREBY FURTHER NOTIFIED that in order to receive any dividend in this proceeding you must file proof of claim with the receiver on or before , (120 days from the date of appointment of the receiver). | |||
| RECEIVER | |||
| Attorney for receiver (if any): | |||
| Address: | |||
NEW SECTION. Sec. 23 A new section is added to chapter 7.60 RCW
to read as follows:
(2) Claims must be served by delivering the claim to the general
receiver within thirty days from the date notice is given by mail under
this section, unless the court reduces or extends the period for cause
shown, except that a claim arising from the rejection of an executory
contract or an unexpired lease of the person over whose property the
receiver is appointed may be filed within thirty days after the
rejection. Claims need not be filed.
(3) Claims must be in written form entitled "Proof of Claim,"
setting forth the name and address of the creditor and the nature and
amount of the claim, and executed by the creditor or the creditor's
authorized agent. When a claim, or an interest in estate property of
securing the claim, is based on a writing, the original or a copy of
the writing must be included as a part of the proof of claim, together
with evidence of perfection of any security interest or other lien
asserted by the claimant.
(4) A claim, executed and served in accordance with this section,
constitutes prima facie evidence of the validity and amount of the
claim.
NEW SECTION. Sec. 24 A new section is added to chapter 7.60 RCW
to read as follows:
(2) Upon the request of a creditor, the general receiver, or any
party in interest objecting to the creditor's claim, or upon order of
the court, an objection is subject to mediation prior to adjudication
of the objection, under the rules or orders adopted or issued with
respect to mediations.
(3) Upon motion of the general receiver or other party in interest,
the following claims may be estimated for purpose of allowance under
this section under the rules or orders applicable to the estimation of
claims under this subsection:
(a) Any contingent or unliquidated claim, the fixing or liquidation
of which, as the case may be, would unduly delay the administration of
the case; or
(b) Any right to payment arising from a right to an equitable
remedy for breach of performance.
Claims subject to this subsection shall be allowed in the estimated
amount thereof.
NEW SECTION. Sec. 25 A new section is added to chapter 7.60 RCW
to read as follows:
(a) Creditors with liens on property of the estate, which liens are
duly perfected under applicable law, shall receive the proceeds from
the disposition of their collateral. However, the receiver may recover
from property securing an allowed secured claim the reasonable,
necessary expenses of preserving, protecting, or disposing of the
property to the extent of any benefit to the creditors. If and to the
extent that the proceeds are less than the amount of a creditor's
allowed claim or a creditor's lien is avoided on any basis, the
creditor is an unsecured claim under (g) of this subsection. Secured
claims shall be paid from the proceeds in accordance with their
respective priorities under otherwise applicable law.
(b) Actual, necessary costs and expenses incurred during the
administration of the estate, other than those expenses allowable under
(a) of this subsection, including allowed fees and reimbursement of
reasonable charges and expenses of the receiver and professional
persons employed by the receiver under section 20 of this act.
Notwithstanding (a) of this subsection, expenses incurred during the
administration of the estate have priority over the secured claim of
any creditor obtaining or consenting to the appointment of the
receiver.
(c) Creditors with liens on property of the estate, which liens
have not been duly perfected under applicable law, shall receive the
proceeds from the disposition of their collateral if and to the extent
that unsecured claims are made subject to those liens under applicable
law.
(d) Claims for wages, salaries, or commissions, including vacation,
severance, and sick leave pay, or contributions to an employee benefit
plan, earned by the claimant within ninety days of the date of
appointment of the receiver or the cessation of the estate's business,
whichever occurs first, but only to the extent of two thousand dollars.
(e) Allowed unsecured claims, to the extent of nine hundred dollars
for each individual, arising from the deposit with the person over
whose property the receiver is appointed before the date of appointment
of the receiver of money in connection with the purchase, lease, or
rental of property or the purchase of services for personal, family, or
household use by individuals that were not delivered or provided.
(f) Unsecured claims of governmental units for taxes which accrued
prior to the date of appointment of the receiver.
(g) Other unsecured claims.
(2) If all of the classes under subsection (1) of this section have
been paid in full, any residue shall be paid to the person over whose
property the receiver is appointed.
NEW SECTION. Sec. 26 A new section is added to chapter 7.60 RCW
to read as follows:
NEW SECTION. Sec. 27 A new section is added to chapter 7.60 RCW
to read as follows:
NEW SECTION. Sec. 28 A new section is added to chapter 7.60 RCW
to read as follows:
(2) The court may order that a general receiver's sale of estate
property under subsection (1) of this section be effected free and
clear of liens 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:
(a) The property is real property used principally in the
production of crops, livestock, or aquaculture, or the property is a
homestead under RCW 6.13.010(1), and the owner of the property has not
consented to the sale following the appointment of the receiver; or
(b) The owner of the property or a creditor with an interest in the
property serves and files a timely opposition to the receiver's sale,
and the court determines that the amount likely to be realized by the
objecting person from the receiver's sale is less than the person would
realize 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 security interests and other liens encumbering the property
conveyed transfer and attach to the proceeds of the sale, net of
reasonable expenses incurred in the disposition of the property, in the
same order, priority, and validity as the liens had with respect to the
property immediately before the conveyance. The court may authorize
the receiver at the time of sale to satisfy, in whole or in part, any
allowed claim secured by the property 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 property under subsection (1) of this
section, a creditor with an allowed claim secured by a lien against the
property to be sold may bid at the sale of the property. A secured
creditor who purchases the property from a receiver may offset against
the purchase price its allowed secured claim against the property,
provided that the secured creditor tenders cash sufficient to satisfy
in full all secured claims payable out of the proceeds of sale having
priority over the 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 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 coowner of
property, the receiver shall have the rights and powers of a coowner
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 an entity that
purchased or leased the property in good faith, whether or not the
entity knew of the pendency of the appeal, unless the authorization and
sale or lease were stayed pending the appeal.
NEW SECTION. Sec. 29 A new section is added to chapter 7.60 RCW
to read as follows:
(2) A receiver appointed by a court of another state, or by a
federal court in any district outside of this state, or any other
person having an interest in that proceeding, may obtain appointment by
a superior court of this state of that same receiver with respect to
any property or business of the person over whose property the receiver
is appointed constituting property of the foreign receivership that is
located in this jurisdiction, if the person is eligible under section
5 of this act to serve as receiver, and if the appointment is necessary
to the receiver's possession, control, or disposition of the property
in accordance with orders of the court in the foreign proceeding. The
superior court upon the receiver's request shall enter the orders, not
offensive to the laws and public policy of this state, necessary to
effectuate orders entered by the court in the foreign receivership
proceeding. A receiver appointed in an ancillary receivership in this
state is required to comply with this chapter requiring notice to
creditors or other parties in interest only as may be required by the
superior court in the ancillary receivership.
NEW SECTION. Sec. 30 A new section is added to chapter 7.60 RCW
to read as follows:
(2) Upon removal, resignation, or death of the receiver, the court
shall appoint a successor receiver if the court determines that further
administration of the estate is required. Upon executing and filing a
bond under section 6 of this act, the successor receiver shall
immediately take possession of the estate and assume the duties of
receiver.
(3) Whenever the court is satisfied that the receiver so removed or
replaced has fully accounted for and turned over to the successor
receiver appointed by the court all of the property of the estate and
has filed a report of all receipts and disbursements during the
person's tenure as receiver, the court shall enter an order discharging
that person from all further duties, liabilities, and responsibilities
as receiver after notice and a hearing, and upon finding that the
receiver so removed or replaced has fully complied with this
subsection, shall release any bond filed by such receiver under section
6 of this act.
NEW SECTION. Sec. 31 A new section is added to chapter 7.60 RCW
to read as follows:
(2) The receiver's final report and accounting setting forth all
receipts and disbursements of the estate shall be annexed to the
petition for discharge and filed with the court.
(3) Upon approval of the final report, the court shall discharge
the receiver and release the receiver's bond.
(4) The receiver's discharge releases the receiver from any further
duties, liabilities, and responsibilities as receiver under this
chapter.
(5) Upon motion of any party in interest, or upon the court's own
motion, the court has the power to discharge the receiver and terminate
the court's administration of the property over which the receiver was
appointed. If the court determines that the appointment of the
receiver was wrongfully procured or procured in bad faith, the court
may assess against the person who procured the receiver's appointment
(a) all of the receiver's fees and other costs of the receivership and
(b) any other sanctions the court determines to be appropriate.
(6) Notice of any motion for termination of a receivership or
discharge of a receiver shall be given to all persons interested in the
receivership as far as they can conveniently be ascertained.
NEW SECTION. Sec. 32 A new section is added to chapter 7.60 RCW
to read as follows:
Sec. 33 RCW 4.28.320 and 1999 c 233 s 1 are each amended to read
as follows:
((In an action affecting the title to real property the plaintiff,
at the time of filing the complaint, or at any time afterwards, or
whenever a writ of attachment of property shall be issued, or at any
time afterwards, the plaintiff or a defendant, when he sets up an
affirmative cause of action in his answer, and demands substantive
relief at the time of filing his answer, or at any time afterwards, if
the same be intended to affect real property,)) At any time after an
action affecting title to real property has been commenced, or after a
writ of attachment with respect to real property has been issued in an
action, or after a receiver has been appointed with respect to any real
property, the plaintiff, the defendant, or such a receiver may file
with the auditor of each county in which the property is situated a
notice of the pendency of the action, containing the names of the
parties, the object of the action, and a description of the real
property in that county affected thereby. From the time of the filing
only shall the pendency of the action be constructive notice to a
purchaser or encumbrancer of the property affected thereby, and every
person whose conveyance or encumbrance is subsequently executed or
subsequently recorded shall be deemed a subsequent purchaser or
encumbrancer, and shall be bound by all proceedings taken after the
filing of such notice to the same extent as if he or she were a party
to the action. For the purpose of this section an action shall be
deemed to be pending from the time of filing such notice: PROVIDED,
HOWEVER, That such notice shall be of no avail unless it shall be
followed by the first publication of the summons, or by the personal
service thereof on a defendant within sixty days after such filing.
And the court in which the said action was commenced may, at its
discretion, at any time after the action shall be settled, discontinued
or abated, on application of any person aggrieved and on good cause
shown and on such notice as shall be directed or approved by the court,
order the notice authorized in this section to be canceled of record,
in whole or in part, by the county auditor of any county in whose
office the same may have been filed or recorded, and such cancellation
shall be evidenced by the recording of the court order.
Sec. 34 RCW 6.32.100 and 1893 c 133 s 10 are each amended to read
as follows:
((After a receiver has been appointed or a receivership has been
extended to the special proceedings, the judge must, by order, direct
the sheriff to pay the money, or the proceeds of the property,
deducting his fees, to the receiver; or if the case so requires to
deliver to the receiver the property in his hands. But if it appears
to the satisfaction of the judge that an order appointing a receiver or
extending a receivership is not necessary, he may, by an order reciting
that fact,)) Unless a receiver has been appointed or extended with
respect to money or property in the hands of the sheriff, the judge may
direct the sheriff to apply the money ((so paid)), the property, or the
proceeds of the property ((so delivered)), upon an execution in favor
of the judgment creditor issued either before or after the payment or
delivery to the sheriff.
Sec. 35 RCW 6.32.150 and 1893 c 133 s 15 are each amended to read
as follows:
A special proceeding instituted as prescribed in this chapter may
be discontinued at any time upon such terms as justice requires, by an
order of the judge made upon the application of the judgment creditor.
Where the judgment creditor unreasonably delays or neglects to proceed,
or where it appears that ((his)) the judgment has been satisfied,
((his)) the special proceedings may be dismissed upon like terms by a
like order made upon the application of the judgment debtor, or of
plaintiff in a judgment creditor's action against the debtor, or of a
judgment creditor who has instituted either of the special proceedings
authorized by this chapter. ((Where an order appointing a receiver or
extending a receivership has been made in the course of the special
proceeding, notice of the application for an order specified in this
section must be given in such manner as the judge deems proper, to all
persons interested in the receivership as far as they can conveniently
be ascertained.))
Sec. 36 RCW 7.08.010 and 1893 c 100 s 1 are each amended to read
as follows:
No general assignment of property by an insolvent, or in
contemplation of insolvency, for the benefit of creditors, shall be
valid unless it be made for the benefit of all ((his)) of the
assignor's creditors in proportion to the amount of their respective
claims((; and after the payment of the costs and disbursements thereof,
including the attorney fees allowed by law in case of judgment, out of
the estate of the insolvent, such claim or claims shall be deemed as
presented, and shall share pro rata with other claims as hereinafter
provided)).
Sec. 37 RCW 7.08.030 and 1890 p 83 s 3 are each amended to read
as follows:
((The debtor shall annex to such assignment an inventory, under
oath, of all his estate, real and personal, according to the best of
his knowledge, and also a list of his creditors, with their post office
address and a list of the amount of their respective demands, but such
inventory shall not be conclusive as to the amount of the debtor's
estate. Every assignment shall be in writing, and duly acknowledged in
the same manner as conveyances of real estate, and recorded in the
record of deeds of the county where the person making the same resides,
or where the business in respect to which the same is made has been
carried on.))
(1) An assignment under this chapter must be in substantially the
following form:
THIS ASSIGNMENT is made this . . . . day of . . . . . ., . . . .,
by and between . . . . . . . . , with a principal place of business at . . . . . . . . (hereinafter
"assignor"), and . . . . . . . . , whose address is . . . . . . . . (hereinafter "assignee").
WHEREAS, the assignor has been engaged in the business of . . . . . . . . . . . .
. . . . . . . . . . . .
WHEREAS, the assignor is indebted to creditors, as set forth in
Schedule A annexed hereto, is unable to pay debts as they become due,
and is desirous of providing for the payment of debts, so far as it is
possible by an assignment of all property for that purpose.
NOW, THEREFORE, the assignor, in consideration of the assignee's
acceptance of this assignment, and for other good and valuable
consideration, hereby grants, assigns, conveys, transfers, and sets
over, unto the assignee, and the assignee's successors and assigns, all
of assignor's property, except such property as is exempt by law from
levy and sale under an execution (and then only to the extent of such
exemption), including, but not limited to, all real property, fixtures,
goods, stock, inventory, equipment, furniture, furnishings, accounts
receivable, general intangibles, bank deposits, cash, promissory notes,
cash value and proceeds of insurance policies, claims, and demands
belonging to the assignor, wherever such property may be located
(hereinafter collectively the "estate"), which property is, to the best
knowledge and belief of the assignor, fully and accurately set forth on
Schedule B annexed hereto.
By making this assignment, the assignor consents to the appointment
of the assignee as a general receiver with respect to the assignee's
property in accordance with Chapter 7.60 RCW.
The assignee shall take possession and administer the estate, and
shall liquidate the estate with reasonable dispatch and convert the
estate into money, collect all claims and demands hereby assigned as
and to the extent they may be collectible, and pay and discharge all
reasonable expenses, costs, and disbursements in connection with the
execution and administration of this assignment from the proceeds of
such liquidations and collections.
The assignee shall then pay and discharge in full, to the extent
that funds are available in the estate after payment of administrative
expenses, costs, and disbursements, all of the debts and liabilities
now due from the assignor, including interest on such debts and
liabilities in full, according to their priority as established by law,
and on a pro rata basis within each class.
In the event that all debts and liabilities are paid in full, the
remainder of the estate shall be returned to the assignor.
To accomplish the purposes of this assignment, the assignor hereby
irrevocably appoints the assignee as the assignor's true and lawful
attorney in fact, with full power and authority to do all acts and
things which may be necessary to execute and fulfill the assignment
hereby created, to the same extent as such acts and things might be
done by assignor in the absence of this assignment, including but not
limited to the power to demand and recover from all persons all
property of the estate; to sue for the recovery of such property; to
execute, acknowledge, and deliver all necessary deeds, instruments, and
conveyances, and to grant and convey any or all of the real or personal
property of the estate pursuant thereto; and to appoint one or more
attorneys to assist the assignee in carrying out the assignee's duties
hereunder.
The assignor hereby authorizes the assignee to sign the name of the
assignor to any check, draft, promissory note, or other instrument in
writing which is payable to the order of the assignor, or to sign the
name of the assignor to any instrument in writing, whenever it shall be
necessary to do so, to carry out the purposes of this assignment.
The assignor declares, under penalty of perjury under the laws of
the state of Washington, that the attached list of creditors and of the
property of the assignor is true and complete to the best of the
assignor's knowledge.
The assignment shall be signed by the assignor and duly
acknowledged in the same manner as conveyances of real property before
a notary public of this state, and shall include an acceptance of the
assignment by the assignee in substantially the following form:
The assignee hereby accepts the trust created by the foregoing
assignment, and agrees faithfully and without delay to carry out the
assignee's duties under the foregoing assignment.
| . . . . . . . . . . . . Assignor | . . . . . . . . . . . . Assignee |
| Dated: . . . . . . . . . . . . | Dated: . . . . . . . . . . . . |
Sec. 38 RCW 7.56.110 and Code 1881 s 712 are each amended to read
as follows:
If judgment be rendered against any corporation or against any
persons claiming to be a corporation, the court may cause the costs to
be collected by executions against the persons claiming to be a
corporation or by attachment against the directors or other officers of
the corporation, and shall restrain the corporation, ((appoint a
receiver of its property and effects,)) take an account, and make a
distribution thereof among the creditors. The prosecuting attorney
shall immediately institute proceedings for that purpose.
Sec. 39 RCW 11.64.022 and 1989 c 373 s 15 are each amended to
read as follows:
If the surviving partner or partners fail or refuse to furnish an
inventory or list of liabilities, to permit an appraisal, or to account
to the personal representative, or to furnish a bond when required
pursuant to RCW 11.64.016, the court shall order a citation to issue
requiring the surviving partner or partners to appear and show cause
why they have not furnished an inventory list of liabilities, or
permitted an appraisal or why they should not account to the personal
representative or file a bond. The citation shall be served not less
than ten days before the return day designated therein, or such shorter
period as the court upon a showing of good cause deems appropriate. If
the surviving partner or partners neglect or refuse to file an
inventory or list of liabilities, or to permit an appraisal, or fail to
account to the court or to file a bond, after they have been directed
to do so, they may be punished for a contempt of court as provided in
chapter 7.21 RCW. Where the surviving partner or partners fail to file
a bond after being ordered to do so by the court, the court may also
appoint a receiver of the partnership estate ((with like powers and
duties of receivers in equity)) under chapter 7.60 RCW, and may order
the costs and expenses of the proceedings to be paid out of the
partnership estate or out of the estate of the decedent, or by the
surviving partner or partners personally, or partly by each of the
parties.
Sec. 40 RCW 23B.14.320 and 1989 c 165 s 165 are each amended to
read as follows:
(1) A court in a judicial proceeding brought to dissolve a
corporation may appoint one or more receivers to wind up and liquidate,
or one or more custodians to manage, the business and affairs of the
corporation. The court shall hold a hearing, after notifying all
parties to the proceeding and any interested persons designated by the
court, before appointing a receiver or custodian. ((The court
appointing a receiver or custodian has exclusive jurisdiction over the
corporation and all of its property wherever located.))
(2) The court may appoint an individual or a domestic or foreign
corporation, authorized to transact business in this state, as a
receiver or custodian. The court may require the receiver or custodian
to post bond, with or without sureties, in an amount the court directs.
(3) The ((court shall describe the powers and duties of the
receiver or custodian in its appointing order, which may be amended
from time to time. Among other powers:)) receiver or custodian may exercise all of the powers of
the corporation, through or in place of its board of directors or
officers, to the extent necessary to manage the affairs of the
corporation in the best interests of its shareholders and creditors.
(a) The receiver (i) may dispose of all or any part of the assets
of the corporation wherever located, at a public or private sale, if
authorized by the court, and (ii) may sue and defend in the receiver's
own name as receiver of the corporation in all courts of this state;
and
(b) The
(4) The court, during a receivership, may redesignate the receiver
a custodian, and during a custodianship may redesignate the custodian
a receiver, if doing so is in the best interests of the corporation,
its shareholders, and creditors.
(5) The court from time to time during the receivership or
custodianship may order compensation paid and expense disbursements or
reimbursements made to the receiver or custodian and counsel from the
assets of the corporation or proceeds from the sale of the assets.
Sec. 41 RCW 24.06.305 and 1969 ex.s. c 120 s 61 are each amended
to read as follows:
(1) In proceedings to liquidate the assets and affairs of a
corporation the court shall have the power to:
(a) Issue injunctions;
(b) Appoint a receiver or receivers pendente lite, with such powers
and duties as the court may, from time to time, direct;
(c) Take such other proceedings as may be requisite to preserve the
corporate assets wherever situated; and
(d) Carry on the affairs of the corporation until a full hearing
can be had.
After a hearing had upon such notice as the court may direct to be
given to all parties to the proceedings, and to any other parties in
interest designated by the court, the court may appoint a receiver
((with authority to collect the assets of the corporation. Such
receiver shall have authority, subject to the order of the court, to
sell, convey and dispose of all or any part of the assets of the
corporation wherever situated, either at public or private sale. The
order appointing such receiver shall state his powers and duties. Such
powers and duties may be increased or diminished at any time during the
proceedings)).
(2) The assets of the corporation or the proceeds resulting from
the sale, conveyance, or other disposition thereof shall be applied and
distributed as follows:
(a) All costs and expenses of the court proceedings, and all
liabilities and obligations of the corporation shall be paid, satisfied
and discharged, or adequate provision made therefor;
(b) Assets held by the corporation upon condition requiring return,
transfer, or conveyance, which condition occurs by reason of the
dissolution or liquidation, shall be returned, transferred, or conveyed
in accordance with such requirements;
(c) Remaining assets, if any, shall be distributed to the members,
shareholders, or others in accordance with the provisions of the
articles of incorporation.
(3) The court shall have power to make periodic allowances, as
expenses of the liquidation and compensation to the receivers and
attorneys in the proceeding accrue, and to direct the payment thereof
from the assets of the corporation or from the proceeds of any sale or
disposition of such assets.
((A receiver appointed under the provisions of this section shall
have authority to sue and defend in all courts in his own name, as
receiver of such corporation. The court appointing such receiver shall
have exclusive jurisdiction of the corporation and its property,
wherever situated.))
NEW SECTION. Sec. 42 A new section is added to chapter 31.12 RCW
to read as follows:
Except in cases in which a receiver is appointed by a court on a
temporary basis under RCW 31.12.721, the provisions of Title 7 RCW
generally applicable to receivers and receiverships do not apply to
receivers elected or appointed under this chapter.
NEW SECTION. Sec. 43 A new section is added to chapter 35.07 RCW
to read as follows:
The provisions of Title 7 RCW generally applicable to receivers and
receiverships do not apply to receivers elected or appointed under this
chapter.
NEW SECTION. Sec. 44 A new section is added to chapter 35A.15
RCW to read as follows:
The provisions of Title 7 RCW generally applicable to receivers and
receiverships do not apply to receivers elected or appointed under this
chapter.
Sec. 45 RCW 87.56.065 and 1925 ex.s. c 124 s 7 are each amended
to read as follows:
At the time and place fixed in ((said)) the notice the court shall
hear the objections of interested persons and shall determine whether
the district is insolvent within the provisions of this chapter and
whether the district shall be dissolved. If the court concludes that
the district shall not dissolve, ((he)) the court shall so find and
dismiss the action. If the court concludes that the district should be
dissolved, ((he)) the court shall appoint a receiver ((with bond
conditioned for faithful performance of his duties in such sum as the
court shall determine,)) to take charge of the district assets and to
perform such other duties as may be required by the court or by law.
Sec. 46 RCW 87.56.100 and 1925 ex.s. c 124 s 12 are each amended
to read as follows:
If the owner or holder of a claim of indebtedness against the
district not yet due or matured ((shall be entitled to serve upon the
receiver and file a statement of his claim with the clerk of the court,
as in the case of due and matured indebtedness, and the filing of such
claim shall constitute an election on the part of the claimant
authorizing the court in its discretion to accelerate the maturity of
said indebtedness)) files a claim in any case in which a receiver is
appointed under RCW 87.56.065, the maturity of the indebtedness owing
to the person by the district shall be accelerated to such date as the
court shall determine upon.
NEW SECTION. Sec. 47 The following acts or parts of acts are
each repealed:
(1) RCW 4.28.081 (Summons, how served -- When corporation in hands of
receiver) and 1897 c 97 s 1;
(2) RCW 6.25.200 (Appointment of receiver for property) and 1987 c
442 s 820, 1957 c 9 s 9, & 1886 p 42 s 15;
(3) RCW 6.32.290 (Appointment of receiver -- Notice) and 1893 c 133
s 28;
(4) RCW 6.32.300 (Effect on pending supplemental proceedings) and
1893 c 133 s 29;
(5) RCW 6.32.310 (Only one receiver may be appointed -- Extending
receivership) and 1893 c 133 s 30;
(6) RCW 6.32.320 (Order, where to be filed) and 1893 c 133 s 31;
(7) RCW 6.32.330 (Property vested in receiver) and 1893 c 133 s 32;
(8) RCW 6.32.340 (Receiver's title extends back by relation) and
1893 c 133 s 33;
(9) RCW 6.32.350 (Records to be kept by clerk) and 2002 c 30 s 2 &
1893 c 133 s 34;
(10) RCW 7.08.020 (Assent of creditors presumed) and 1890 p 83 s 2;
(11) RCW 7.08.050 (Inventory by assignee -- Bond) and 1890 p 85 s 4;
(12) RCW 7.08.060 (Notice to creditors) and 1890 p 85 s 5;
(13) RCW 7.08.070 (List of creditors' claims) and 1890 p 85 s 6;
(14) RCW 7.08.080 (Exceptions to claims) and 1957 c 9 s 7 & 1890 p
85 s 7;
(15) RCW 7.08.090 (Dividends -- Final account -- Compensation) and 1893
c 26 s 1 & 1890 p 86 s 8;
(16) RCW 7.08.100 (Assignee subject to court's control) and 1890 p
86 s 9;
(17) RCW 7.08.110 (Assignment not void, when) and 1957 c 9 s 8 &
1890 p 86 s 10;
(18) RCW 7.08.120 (Additional inventory) and 1890 p 86 s 11;
(19) RCW 7.08.130 (Procedure on claims not due -- Limitation on
presentment of claims) and 1890 p 86 s 12;
(20) RCW 7.08.140 (Authority of assignee to dispose of assets) and
1890 p 87 s 13;
(21) RCW 7.08.150 (Procedure when assignee dies, fails to act,
misapplies estate, or if bond insufficient) and 1890 p 87 s 14;
(22) RCW 7.08.170 (Discharge of assignor) and 1895 c 151 s 1 & 1890
p 88 s 15;
(23) RCW 7.08.180 (Sheriff disqualified from acting) and 1893 c 137
s 1;
(24) RCW 7.08.190 (Right of assignor to exemption) and 1897 c 6 s
1;
(25) RCW 7.08.200 (Exemption, how claimed -- Objections) and 1897 c
6 s 2;
(26) RCW 7.60.010 (Receiver defined) and 1891 c 52 s 1;
(27) RCW 7.60.020 (Grounds for appointment) and 1998 c 295 s 18,
1937 c 47 s 1, Code 1881 s 193, 1877 p 40 s 197, 1869 p 48 s 196, &
1854 p 162 s 171;
(28) RCW 7.60.030 (Oath -- Bond) and Code 1881 s 194, 1877 p 41 s
198, 1869 p 48 s 198, & 1854 p 162 s 173;
(29) RCW 7.60.040 (Powers of receiver) and Code 1881 s 198, 1877 p
41 s 202, 1869 p 49 s 202, & 1854 p 163 s 177;
(30) RCW 7.60.050 (Order when part of claim admitted) and Code 1881
s 199, 1877 p 41 s 203, 1869 p 49 s 203, & 1854 p 163 s 178;
(31) RCW 23.72.010 (Definitions) and 1959 c 219 s 1 & 1941 c 103 s
1;
(32) RCW 23.72.020 (Action to recover -- Limitation) and 1941 c 103
s 2;
(33) RCW 23.72.030 (Preference voidable, when -- Recovery) and 1959
c 219 s 2 & 1941 c 103 s 3;
(34) RCW 23.72.040 (Mutual debts and credits) and 1941 c 103 s 4;
(35) RCW 23.72.050 (Attorney's fees -- Reexamination) and 1941 c 103
s 5;
(36) RCW 23.72.060 (Setoffs and counterclaims) and 1941 c 103 s 6;
(37) RCW 24.03.275 (Qualification of receivers -- Bond) and 1967 c
235 s 56;
(38) RCW 24.03.280 (Filing of claims in liquidation proceedings)
and 1967 c 235 s 57;
(39) RCW 24.03.285 (Discontinuance of liquidation proceedings) and
1967 c 235 s 58;
(40) RCW 24.03.310 (Powers of foreign corporation) and 1967 c 235
s 63;
(41) RCW 24.03.315 (Corporate name of foreign corporation--Fictitious name) and 1982 c 35 s 98 & 1967 c 235 s 64;
(42) RCW 24.03.320 (Change of name by foreign corporation) and 1986
c 240 s 44 & 1967 c 235 s 65;
(43) RCW 87.56.070 (Qualifications, duties, compensation of
receiver) and 1925 ex.s. c 124 s 8;
(44) RCW 87.56.080 (Notice to creditors) and 1985 c 469 s 93 & 1925
ex.s. c 124 s 9;
(45) RCW 87.56.085 (Notice to creditors -- Contents) and 1925 ex.s.
c 124 s 10;
(46) RCW 87.56.090 (Unfiled claims barred -- Effect of not filing
claim of bond lien) and 1925 ex.s. c 124 s 11;
(47) RCW 87.56.110 (Collection and disbursement of funds) and 1925
ex.s. c 124 s 13;
(48) RCW 87.56.120 (Receiver's report -- Plan of liquidation) and
1925 ex.s. c 124 s 14;
(49) RCW 87.56.130 (Time for hearing receiver's report to be
fixed -- Notice) and 1985 c 469 s 94 & 1925 ex.s. c 124 s 15;
(50) RCW 87.56.135 (Time for hearing receiver's report to be
fixed -- Contents) and 1925 ex.s. c 124 s 16;
(51) RCW 87.56.140 (Objections to report) and 1925 ex.s. c 124 s
17;
(52) RCW 87.56.145 (Objections to report -- Fee) and 1925 ex.s. c 124
s 18;
(53) RCW 87.56.150 (Hearing -- Court's powers and duties) and 1925
ex.s. c 124 s 19; and
(54) RCW 87.56.155 (Decree -- Plan of liquidation) and 1925 ex.s. c
124 s 20.
NEW SECTION. Sec. 48 Captions used in this act are not part of
the law.