Creditors' actions

Also under current law, a creditor may petition the court to sequestrate a debtor's property and appoint a receiver if the execution of the creditor's judgment against the debtor is returned unsatisfied or if a debtor corporation is insolvent or has been dissolved. If the court appoints a receiver or an assignment is filed, the receiver or assignee is vested with title to the debtor's property and the debtor must file with the court an inventory of the debtor's assets and a list of the debtor's creditors along with the amount due each. The receiver or assignee must give notice of the proceeding to the debtor's creditors and these creditors have three months to file their claims. At the expiration of this three-month period, the receiver or assignee must file certain information with the court, including a list of creditors and claims filed. The receiver or assignee or a creditor may object to any claim and obtain a court hearing as to the objection. As part of the proceeding, the court orders distribution of the debtor's assets in a specified order of priority and, during the proceeding, the court may also enjoin other proceedings by creditors against the debtor. Within six months after the expiration of the three-month period for filing claims, a receiver or assignee must file with the court a report containing a full and itemized statement of certain information relating to the receivership or assignment, including the property received by the receiver or assignee and the manner in which the receiver or assignee dealt with the property; the names of the debtor's creditors; the amount of money realized by the receiver or assignee; and the receiver's or assignee's receipts and disbursements, including amounts paid to the debtor's creditors. After filing this report and giving notice to the creditors, the receiver or assignee may apply to the court for a final settlement of accounts, which occurs by order of the court after an opportunity for hearing.

Current law also includes additional provisions relating to a secured creditor's claims against a debtor's assets in a liquidation proceeding and disclosure of the nature of the creditor's security interest.

This bill repeals all of these provisions.