§ 10-21-16. Use or transfer of receivership property not in the ordinary course of business.
(a) In this section, “good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing.
(b) With court approval, a receiver may use receivership property other than in the ordinary course of business.
(c) With court approval, a receiver may transfer receivership property other than in the ordinary course of business by sale, lease, license, exchange, or other disposition. Unless the agreement of sale provides otherwise, a sale under this section is free and clear of a lien of the person that obtained appointment of the receiver, any subordinate lien, and any right of redemption. However, unless the holder of a senior lien consents, such a sale:
(1) Is subject to the senior lien and to the rights and remedies of the holder of the senior lien under law other than this chapter; and
(2) Does not affect the obligation secured by the senior lien.
(d) A lien on receivership property which is extinguished by a transfer under subsection (c) of this section attaches to the proceeds of the transfer with the same validity, perfection, and priority the lien had on the property immediately before the transfer, even if the proceeds are not sufficient to satisfy all obligations secured by the lien.
(e) A transfer under subsection (c) of this section may occur by means other than a public auction sale. A creditor holding a valid lien on the property to be transferred may purchase the property and offset against the purchase price part or all of the allowed amount secured by the lien, if the creditor tenders funds sufficient to satisfy in full the reasonable expenses of transfer and the obligation secured by any senior lien extinguished by the transfer.
(f) A reversal or modification of an order approving a transfer under subsection (c) of this section does not affect the validity of the transfer to a person that acquired the property in good faith or revive against the person any lien extinguished by the transfer, whether or not the person knew before the transfer of the request for reversal or modification, unless the court stayed the order before the transfer.
History of Section.P.L. 2022, ch. 107, § 1, effective June 20, 2022; P.L. 2022, ch. 108, § 1, effective June 20, 2022.
Structure Rhode Island General Laws
Title 10 - Courts and Civil Procedure – Procedure in Particular Actions
Chapter 10-21 - Rhode Island Commercial Receivership Act
Section 10-21-1. - Short title.
Section 10-21-2. - Definitions.
Section 10-21-3. - Notice and opportunity for hearing.
Section 10-21-3.1. - Administrative and procedural orders in temporary non-liquidating receivership.
Section 10-21-4. - Scope — Exclusions.
Section 10-21-5. - Power of court.
Section 10-21-6. - Appointment of receiver.
Section 10-21-6.1. - Appointment of temporary non-liquidating receiver.
Section 10-21-7. - Disqualification from appointment as receiver — Disclosure of interest.
Section 10-21-8. - Receiver’s bond — Alternative security.
Section 10-21-9. - Status of receiver as lien creditor.
Section 10-21-10. - Security interest covering after-acquired property.
Section 10-21-11. - Collection and turnover of receivership property.
Section 10-21-12. - Powers and duties of receiver.
Section 10-21-12.1. - Powers and duties of temporary non-liquidating receiver — Operating plan.
Section 10-21-13. - Duties of owner.
Section 10-21-13.1. - Owner’s duties in temporary non-liquidating receivership.
Section 10-21-14. - Stay — Injunction.
Section 10-21-14.1. - Stay in a temporary non-liquidating receivership.
Section 10-21-15. - Engagement and compensation of professional.
Section 10-21-16. - Use or transfer of receivership property not in the ordinary course of business.
Section 10-21-17. - Executory contract.
Section 10-21-18. - Defenses and immunities of receiver.
Section 10-21-19. - Interim report of receiver.
Section 10-21-19.1. - Interim report of temporary non-liquidating receiver.
Section 10-21-20. - Notice of appointment — Claim against receivership — Distribution to creditors.
Section 10-21-21. - Fees and expenses.
Section 10-21-21.1. - Emergency declaration receivership program coordinator.
Section 10-21-22. - Removal of receiver — Replacement — Termination of receivership.
Section 10-21-23. - Final report of receiver — Discharge.
Section 10-21-24. - Receivership in another state — Ancillary proceeding.
Section 10-21-25. - Effect of enforcement by secured party.
Section 10-21-26. - Uniformity of application and construction.
Section 10-21-27. - Relation to Electronic Signatures in Global and National Commerce Act.