Local Rule 19

RECEIVERSHIPS

19.1 In all cases where receivers are appointed by the Court, the following shall apply:

A. In General:

1. Procedure Upon Filing of Motion for the Appointment of a Receiver:

a. The following procedure shall apply upon the filing of a motion for the appointment of a receiver with the Clerk of Courts:

(1) The Court shall fix a date for a hearing on the appointment of a receiver;

(2) Notice of the hearing shall be served on interested parties unless the Court finds that the time taken to give notice will result in irreparable harm to the plaintiff;

(3) A schedule of secured and unsecured creditors known to the applicant shall be filed with the Clerk within five (5) days of the order of appointment unless otherwise ordered by the Court.

b. Restrictions on Motions:

(1) A motion for the appointment of a receiver based upon an open account or other claims for which a judgment has not been awarded will be denied where there is no showing of a right to equitable relief.

(2) No motion for the appointment of a receiver that has been denied by one Judge shall be renewed before another Judge.

2. Consent by Defendant:

a. Whenever a defendant consents to the appointment of a receiver, the defendant shall file the following with the Clerk of Courts:

(1) A verified statement of all current assets and liabilities; and

(2) A written statement of consent to the appointment.

(3) A list of known creditors with addresses.

3. Qualifications of Receivers:

a. Oath and Bond:

(1) Before a receiver appointed by the Court performs duties, the receiver must be sworn to perform the duties faithfully, and with surety approved by the Court, Judge, or clerk execute a bond to the person, and in a sum as the Court or Judge directs, to the effect that the receiver will faithfully discharge the duties of the receiver in the action and obey the orders of the Court.

b. Interested Persons:

(1) No party, attorney, or person who is interested in an action shall be appointed receiver in the action without the consent of the parties.

c. Residency Requirements:

(1) All receivers shall reside in Miami County except when good cause is shown and the Court orders otherwise.

(2) No person except a resident of Ohio shall be appointed or act as receiver of a railroad or other corporation.

4. Duties of Receivers:

a. Within thirty (30) days after the date of their appointment, all receivers shall:

(1) File an inventory with the Clerk of Courts and deliver a copy to the assigned Judge unless otherwise ordered by the Court;

(2) Give notice by mail or by publication, as directed by the Court, to all known creditors that they are required to file their claims within sixty (60) days and that unless they file their claims by the specified time, they will not be permitted to file any claim without an order of the Court;

(3) Provide written notification to all public entities and taxing authorities which have claims against the receivership; and

(4) File a list of all claims with the Clerk of Courts after the specified time for filing and deliver a copy to the assigned Judge.

b. All receivers who, upon application, are permitted to operate a business as a going concern shall file the following with the Clerk of Courts and deliver a copy to the assigned Judge sixty (60) days after the application is granted.

(1) A statement of the receiver’s operation which shows a balance sheet for the period;

(2) An operating statement of income and expenditures that includes:

(a) Necessary accruals that make a comprehensive statement of profit and loss for the period;

(b) An inventory of estimated inventory;

(c) Peculiar conditions existing in the business;

(d) A list of expenses of operation, current interest accrued on loans during the period, depreciation on buildings, machinery, and equipment.

c. Within sixty (60) days after their appointment, all receivers shall apply to the Court for authority to cancel or reject all unprofitable contracts.

d. Within sixty (60) days after their duties are completed, all receivers shall file a final account and appropriate records, receipts, or vouchers. All accounts must be approved by the Judge who appointed the receiver.

e. All money coming into the hands of a receiver must be deposited in a federally insured local bank or savings and loan, and the deposit shall be in the receiver’s name, or an attorney IOLTA account.

f. The statements required above shall be filed every sixty (6) days thereafter.

5. Appraisers:

a. All appraisers shall be suggested to the Court and appointed by the Court.

b. Qualifications:

(1) All appraisers shall take an oath to faithfully and accurately appraise all assets submitted to them by the appraisers, including accounts receivable, shall have the same qualifications as appraisers appointed in the Probate Court, and may be one or more of the appraisers in Probate Court.

6. Claims:

a. All claims arising out of judgments shall be accompanied by a certified copy of the final judgment.

b. All claims based upon an instrument for the unconditional payment of money or upon a written contract must be accompanied by a copy of the instrument of contract.

7. Objections:

a. All objections to claims must be made in writing and filed by the interested party within fourteen (14) days of receiver filing a motion to make distribution before distribution is ordered by the Court.

b. All objections to the accounts of receivers or to any allowance made to them by the Court must be filed within fourteen (14) days after the accounts are filed or allowances made.

8. Vacancies in Receiverships:

a. All vacancies in receiverships shall be called to the attention of the Court by receiver’s counsel as soon as they occur.

9. Procedure:

a. Unless otherwise provided, the procedure prescribed by the Ohio Revised Code O.R.C. 2117.25 for settling accounts in decedent’s estates shall govern.

19.2. COMPENSATION OF RECEIVER:

A. No compensation shall be allowed to a receiver or the receiver’s counsel except upon written application describing the services rendered, the time required, the amount requested for each and the amounts, if any, previously received. If there is an objection, the Court shall fix the time for hearing and determine the nature of the notice to creditors of the application. Interim application for compensation may be made every ninety (90) days after appointment.

19.3. SALES BY RECEIVERS (personal property):

A. Sales of all personal property by a receiver shall be for the best price obtainable. The receiver shall file an affidavit to that effect within ten (10) days after the sale.

1. No sale shall be made to a former owner or to any person interested in the business or operation of the receivership until notice is served on all creditors fixing a date for confirmation of the sale.

2. No receiver shall offer for sale any property or any patent until the receiver has established the receiver’s right to sell the property.

3. When it becomes necessary to sell property, notice of the time, place, and terms of the sale shall be given to all creditors who have filed claims and to all stockholders/members who have an interest in the sale.

19.4. SALES OF REAL ESTATE BY RECEIVER (non-foreclosure):

Sale of real estate by a receiver shall occur only by application and approval of the Court.

1. The application shall include a title examination to determine all holders of an interest in the real estate and an appraisal.

2. Notice of the terms of the sale and the appraised value shall be made by certified mail return receipt to all lien holders, parties in interest, and known shareholders/members of the owner of the real estate.

3. Notice shall be made at least fourteen (14) days prior the sale. Interested parties must make an offer of a higher price prior to sale.

4. Private sale or public auction shall be in an amount no less than 2/3 of the appraisal.

5. The receiver shall make a report of sale or no sale, and if sold submit a confirmation order to issue a receiver’s deed, which deed shall be made without warranties.

19.5. RECEIVERS IN REAL ESTATE FORECLOSURES:

A. Procedure Upon Filing of Motion for the Appointment of a Receiver:

1. The following procedure shall be applied upon the filing of a motion for the appointment of a receiver in a foreclosure case with the Clerk of Courts:

a. The date for a hearing on the appointment of a receiver shall be stipulated on the motion;

b. Notice of the hearing shall be served on interested parties either by attachment to the complaint and original summons, or by certified mail in accordance with the Ohio Rules of Civil Procedure.

c. Notice shall be served on the owner of the property at least three (3) business days before the hearing; and

d. The Court may continue hearings from time to time upon the showing of good cause.

B. Appointment of Receivers - Prerequisites:

1. Before any receiver is appointed in a foreclosure case, the following must be demonstrated by affidavit, evidence or representation of counsel:

a. The legal or equitable grounds exist necessitating the appointment of a receiver; and

b. That one or more of the following facts exist:

(1) That the property is insufficient to discharge the mortgage;

(2) That the property is in danger of being vandalized, destroyed, or its value materially impaired;

(3) That the premises have been abandoned by the mortgagor;

(4) That the mortgage embraces the rents and profits in the security;

(5) That the property is income-producing; or

(6) That the mortgage provides for appointment of a receiver without notice.

C. Oath and Bond:

1. Upon appointment, a receiver shall qualify and give a bond within five (5) days of the appointment in the amount required by the Court.

D. Duties of Receivers in a foreclosure:

1. All receivers shall take charge of property pending litigation, preserve property from waste or destruction, receive rents and profits, hold income subject to order of the Court, and have authority to sue in forcible entry in the receiver’s name and capacity.

2. Within sixty (60) days of the date of their appointment and every ninety (90) days thereafter, receivers shall file a report of receipts and disbursements with the Clerk of Courts.

3. No receiver shall lessen the funds coming into the receiver’s hands by expenditure for repairs, or otherwise, exempt real estate taxes and assessments, gas, light and water bills, trash pick-up and insurance, without first procuring an order from the Court, for that purpose, except for necessary expenses under $500.00, which may be made without the order, subject, however, to the final approval of the Court in the receiver’s account.

4. In the event of emergency expenses, the receiver shall immediately make application to the Court for approval of the expenditure. The application shall set forth the nature of the emergency.

5. A Final Receiver’s Report shall be filed within sixty (60) days after the filing of the order distributing proceeds. The Final Receiver’s Report shall indicate that no funds remain in the receiver’s account and that all outstanding bills have been paid.

The receiver shall not be dismissed until the Final Receiver’s Report is approved by the Court as filed.