David Warfield published an article on Missouri’s new receivership statute on Commercial Bankruptcy Alternatives in August, 2016. Warfield characterized the new receivership statute as “modernized,” specifically pointing to concepts imported from bankruptcy law, including: the automatic stay, stay, abandonment of property, ability to incur debt, assumption and rejection of executory contracts and unexpired leases, the receiver’s standing to assert fraudulent transfer claims under Missouri law on behalf of creditors against the received business’s transferees, and the receiver’s power to sell some property free and clear of liens.
In Warfield’s Two Non-Conventional Uses for Missouri’s New Receivership Statute (published on a blog maintained by his law firm, Thompson Coburn LLP), he discusses in detail first the ability of a sole creditor to initiate a receivership of a Missouri farm — with bankruptcy-like powers granted to the receiver. This is significant because chapter 12 of the Bankruptcy Code (which covers farms) bars involuntary bankruptcy filings against farmers. Thus creditors of a farmer can get a receiver appointed to pursue fraudulent transfer actions against transferees of a farmer, even though they cannot put a debtor-farmer into an involuntary bankruptcy case in order to have a trustee pursue similar actions.
In the new article, Warfield also explains in detail how the automatic stay provisions of the new statute work. The upshot is that a laggard in the race to the courthouse (to sue the debtor and gain judgment liens on its property) can pull even by filing a receivership, which establishes a 60-day long automatic stay, with the possibility that the court could extend the stay.
We note, as we did in Warfield’s article on our site, that those who seek more information on Missouri receivership law should see chapter 59 of Strategic Alternatives For and Against Distressed Businesses, an annually updated treatise containing state-by-state descriptions of receivership laws and procedures. California receiverships and federal equity receiverships are discussed elsewhere on Commercial Bankruptcy Alternatives, which also provides an introduction to receiverships.
The editors and editorial board of DailyDAC include preeminent restructuring and insolvency professionals, journalists, and editors. They are devoted to providing reliable and plain English education and deal intelligence about assignments, corporate bankruptcy, receiverships, out-of-court workouts and similar topics.
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