Receiver Powers in a Commercial Foreclosure: Sell and Modify

Receiver Powers in a Commercial Foreclosure: Sell and Modify: Receiver Powers  in a Commercial Foreclosure can include Power to Sell the property and Modify Leases:  In its decision of May 16, 2013, an Ohio Appellate Court confirms that in a commercial foreclosure action the court has the power to appoint a receiver and  grant a receiver pre-judgment power to sell as well as to enter into, modify or terminate all leases in connection with the Defendant’s property and the court may do so without notice or hearing when facts and situation warrant it.  U.S. Bank, N.A. v. Gotham King Fee Owner, L.L.C., 2013-Ohio-1983.The plaintiff bank filed an emergency motion for the appointment of receiver simultaneously with the filing of its complaint. The bank argued that a receiver was necessary to safeguard and protect the property due to the significant number of tenants not currently subject to long-term leases and that the bank was contractually entitled to the appointment pursuant to the terms of the loan documents. The Defendant owner’s argued that the court granted powers to the receiver that exceed those permitted by law and improperly delegated its duty to supervise the receiver to the plaintiff bank.  The Defendant also argued that the court should not have granted the motion without first providing notice and a hearing. The appellate court noted that the loan documents the Defendant had consented to the appointment of a receiver and therefore waived its right to oppose the appointment. The Court addressed each of the following area’s concluding that the trial court did not abuse its powers: Notice and Hearing, The Receiver’s Powers to Lease Property, Advancements for Preservation of the Property, Repairs and Operations, Pre-judgment Power of Sale, and Court’s Duty to Supervise Receiver.