(a)  The court may appoint a receiver:

(1)  Before judgment, to protect a party that demonstrates an apparent right, title, or interest in property that is the subject of the action, if the property or its revenue-producing potential:

(i)  Is being subjected to or is in danger of waste, loss, dissipation, misapplication, or impairment; or

(ii)  Has been or is about to be the subject of a voidable transaction;

(2)  After judgment:

(i)  To carry the judgment into effect; or

(ii)  To preserve nonexempt real property pending appeal or when an execution has been returned unsatisfied and the owner refuses to apply the property in satisfaction of the judgment;

(3)  In an action against a person that is not an individual if:

(i)  The object of the action is the dissolution of the person;

(ii)  The person is not an individual, and the person has been dissolved or revoked;

(iii)  The persons responsible for management of the person are deadlocked in the management of the person’s affairs;

(iv)  The acts of the persons in control of the person are illegal, oppressive, or fraudulent; or

(v)  The person is insolvent or generally is not paying the person’s debts as those debts become due; or

(4)  In an action in which a receiver may be appointed on equitable grounds.

Terms Used In Rhode Island General Laws 10-21-6

  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • Collateral: means the property subject to a lien. See Rhode Island General Laws 10-21-2
  • Court: means the superior court. See Rhode Island General Laws 10-21-2
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • debtor: includes a mortgagor. See Rhode Island General Laws 10-21-2
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Owner: means the person for whose property a receiver is appointed. See Rhode Island General Laws 10-21-2
  • Person: means an individual, estate, partnership, association, trust, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal entity. See Rhode Island General Laws 10-21-2
  • Proceeds: means the following property:

    (i)  Whatever is acquired on the sale, lease, license, exchange, or other disposition of receivership property;

    (ii)  Whatever is collected on, or distributed on account of, receivership property;

    (iii)  Rights arising out of receivership property;

    (iv)  To the extent of the value of receivership property, claims arising out of the loss, nonconformity, or interference with the use of, defects or infringement of rights in, or damage to the property; or

    (v)  To the extent of the value of receivership property and to the extent payable to the owner or secured party, insurance payable by reason of the loss or nonconformity of, defects or infringement of rights in, or damage to the property. See Rhode Island General Laws 10-21-2

  • Property: means all of a person's right, title, and interest, both legal and equitable, in real and personal property, tangible and intangible, wherever located and however acquired. See Rhode Island General Laws 10-21-2
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • Receiver: means a person appointed by the court as the court's agent, and subject to the court's direction, to take possession of, manage, and, if authorized by this chapter or court order, transfer, sell, lease, license, exchange, collect, or otherwise dispose of receivership property. See Rhode Island General Laws 10-21-2
  • Rents: means :

    (i)  Sums payable for the right to possess or occupy, or for the actual possession or occupation of, real property of another person;

    (ii)  Sums payable to a mortgagor under a policy of rental-interruption insurance covering real property;

    (iii)  Claims arising out of a default in the payment of sums payable for the right to possess or occupy real property of another person;

    (iv)  Sums payable to terminate an agreement to possess or occupy real property of another person;

    (v)  Sums payable to a mortgagor for payment or reimbursement of expenses incurred in owning, operating, and maintaining real property or constructing or installing improvements on real property; or

    (vi)  Other sums payable under an agreement relating to the real property of another person which constitute rents under law of this state other than this chapter. See Rhode Island General Laws 10-21-2

  • Secured party: means a person entitled to enforce a secured obligation. See Rhode Island General Laws 10-21-2
  • Security agreement: means an agreement that creates or provides for a lien. See Rhode Island General Laws 10-21-2

(b)  In connection with the foreclosure or other enforcement of a security agreement, the court may appoint a receiver for the collateral if:

(1)  Appointment is necessary to protect the collateral from waste, loss, transfer, dissipation, misapplication, or impairment;

(2)  The debtor agreed in a signed record to appointment of a receiver on default;

(3)  The owner agreed, after default and in a signed record, to appointment of a receiver;

(4)  The collateral and any other security held by the secured party are not reasonably expected to be sufficient to satisfy the secured obligation; or

(5)  The owner fails to turn over to the secured party proceeds or rents the secured party was entitled to collect.

(c)  The court may condition appointment of a receiver without prior notice under § 10-21-3(b)(1) or without a prior hearing under § 10-21-3(b)(2) on the giving of security by the person seeking the appointment for the payment of damages, reasonable attorneys’ fees, and costs incurred or suffered by any person if the court later concludes that the appointment was not justified. If the court later concludes that the appointment was justified, the court shall release the security.

History of Section.
P.L. 2022, ch. 107, § 1, effective June 20, 2022; P.L. 2022, ch. 108, § 1, effective June 20, 2022.