§ 10-21-17. Executory contract.
(a) In this section, “timeshare interest” means a “time share” as defined in § 34-41-1.02.
(b) Except as otherwise provided in subsection (h) of this section, with court approval, a receiver may adopt or reject an executory contract of the owner relating to receivership property. The court may condition the receiver’s adoption and continued performance of the contract on terms appropriate under the circumstances. If the receiver does not request court approval to adopt or reject the contract within a reasonable time after the receiver’s appointment, the receiver is deemed to have rejected the contract.
(c) A receiver’s performance of an executory contract before court approval of its adoption or rejection under subsection (b) of this section is not an adoption of the contract and does not preclude the receiver from seeking approval to reject the contract.
(d) A provision in an executory contract which requires or permits a forfeiture, modification, or termination of the contract because of the appointment of a receiver or the financial condition of the owner does not affect a receiver’s power under subsection (b) of this section to adopt the contract.
(e) A receiver’s right to possess or use receivership property pursuant to an executory contract terminates on rejection of the contract under subsection (b) of this section. Rejection is a breach of the contract effective immediately before appointment of the receiver. A claim for damages for rejection of the contract must be submitted by the later of:
(1) The time set for submitting a claim in the receivership; or
(2) Thirty (30) days after the court approves the rejection.
(f) If at the time a receiver is appointed, the owner has the right to assign an executory contract relating to receivership property under the law of this state other than this chapter, the receiver may assign the contract with court approval.
(g) If a receiver rejects under subsection (b) of this section an executory contract for the sale of receivership property that is real property in possession of the purchaser or a real-property timeshare interest, the purchaser may:
(1) Treat the rejection as a termination of the contract, and in that case the purchaser has a lien on the property for the recovery of any part of the purchase price the purchaser paid; or
(2) Retain the purchaser’s right to possession under the contract, and in that case the purchaser shall continue to perform all obligations arising under the contract and may offset any damages caused by nonperformance of an obligation of the owner after the date of the rejection, but the purchaser has no right or claim against other receivership property or the receiver on account of the damages.
(h) A receiver may not reject an unexpired lease of real property under which the owner is the landlord if:
(1) The tenant occupies the leased premises as the tenant’s primary residence;
(2) The receiver was appointed at the request of a person other than a mortgagee; or
(3) The receiver was appointed at the request of a mortgagee and:
(i) The lease is superior to the lien of the mortgage;
(ii) The tenant has an enforceable agreement with the mortgagee or the holder of a senior lien under which the tenant’s occupancy will not be disturbed as long as the tenant performs its obligations under the lease;
(iii) The mortgagee has consented to the lease, either in a signed record or by its failure timely to object that the lease violated the mortgage; or
(iv) The terms of the lease were commercially reasonable at the time the lease was agreed to and the tenant did not know or have reason to know that the lease violated the mortgage.
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.