Oregon Passes a Comprehensive Receivership Code
On June 15, 2017, Oregon’s Governor signed into law a comprehensive statutory framework for receiverships. Oregon receivership actions are currently governed almost exclusively by two short court rules and case law, so the all-new Receivership Code should help bring uniformity and predictability to receivership proceedings in the state.
Oregon’s Receivership Code overlaps in important ways with Washington’s Receivership Act, which has been in place since 2004. As in Washington, receivers may be appointed by the court to manage, protect, or liquidate real and personal property. The Receivership Code will allow courts to provide receivers with broad authority, including the power to assume or reject executory contracts like leases, to borrow funds, and to employ professionals. The Receivership Code also sets forth standards similar to the Washington Act’s requirements for receiver qualifications and bonding, receivers’ notice and financial reporting, and the submission and priority of creditor claims.
Perhaps most significantly, Oregon’s Receivership Code authorizes the sale of property free and clear of liens and rights of redemption, while also providing secured creditors with the right to credit bid in receivership sales. In Washington, the power to sell property free and clear of liens has led to a significant use of receiverships by creditors seeking an orderly liquidation of property, while avoiding the costs and uncertainty of bankruptcy.
The Receivership Code will take effect for receivership actions filed after January 1, 2018. We recommend that lenders, creditors, and investors become familiar with the ways that this new tool can be used to protect or liquidate their collateral, or to collect upon judgments.
HCMP’s Insolvency Group has extensive experience with receiverships across many states, and its attorneys appear routinely in Oregon courts on these matters. The Insolvency Group’s attorneys are very familiar with Oregon local practice and procedure in receiverships and with receivers.