Last month, Governor Whitmer signed into law legislation amending what was previously known as the Uniform Commercial Real Estate Receivership Act. The UCRERA has now been renamed the “Receivership Act.” The changes, however, are far from cosmetic. While the prior Act, adopted in 2018, only applied to receiverships involving real property, the new Receivership Act expands the law’s scope significantly. It now covers the following categories of “commercial property:” (1) real property, fixtures, and any personal property related to or used in operating the real property; and (2) personal property. MCL 554.1014.
In addition, there are numerous changes to the procedures for the appointment of receivers and the obligations of parties in cases involving a receivership. Below are a few of the highlights:
- Michigan courts are now required to appoint a receiver for good cause shown. And the moving party may request, or the parties may stipulate to, the selection of a receiver; and, if the nonmoving party does not object within 14 days, the court is to appoint the nominated receiver unless it determines a different receiver should be appointed. MCL 554.1017. Interestingly, according to a CLE with some of the legislation’s proponents, there was an intention to limit the scope of, and litigation regarding, objections to the appointment of a receiver.
- The owner of the receivership property must, “within 7 days after the entry of the order appointing the receiver, deliver to the receiver a list containing the name and address of all creditors and other known interested parties of the receivership estate.” MCL 554.1023
- The receiver is to file quarterly interim reports, including:
- The activities of the receiver since appointment or a previous report;
- Receipts and disbursements, including a payment made or proposed to be made to a professional engaged by the receiver;
- Receipts and dispositions of receivership property;
- Fees and expenses of the receiver and, if not filed separately, a request for approval of payment of the fees and expenses; and
- Any other information required by the court.
MCL 554.1029.
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This post is meant to merely serve as a high-level overview of some of the key provisions of the Receivership Act, so please stay tuned for further updates and a deeper dive once it starts to be implemented by Michigan Courts.
