S364 - NC Commercial Receivership Act Revisions. (SL 2020-75)

Overview: S.L. 2020-75 enacts the North Carolina Commercial Receivership Act, repeals statutory provisions governing receiverships and assignments for the benefit of creditors, and requires any action seeking appointment of a general receiver for an entity debtor with assets worth at least $5 million to be designated a mandatory complex business case. The act becomes effective January 1, 2021 and applies to receiverships commenced on or after that date.

CURRENT LAW: Article 38 of Chapter 1 of the General Statutes governs the appointment and duties of receivers. A receiver is appointed by the court to take control of a debtor's property to preserve and manage it before judgment or in aid of execution after judgment, or when the debtor is a corporation that is insolvent or in imminent danger of insolvency, to liquidate the corporate assets as part of a creditor's action.

Articles 1 and 2 of Chapter 23 of the General Statutes govern the procedure by which debtors can make an assignment of their assets for the benefit of their creditors, through which the debtor's assets are assigned to a trustee charged with determining the amounts owed to each creditor and liquidating the property of the debtor to distribute to the creditors.