Receivership Sales of Businesses and Business Assets (Federal and State)
Asset page (court channel). Legal information, not legal advice. Last verified: 2026-10-16.
What it is
A receiver is a neutral officer appointed by a court to take possession of property, run it if necessary, and — when the court authorizes — sell it. Receiverships are used outside bankruptcy: by secured lenders, by judgment creditors, by regulators (for example, in securities-fraud cases), in shareholder deadlocks, and in dissolutions. For a business buyer a receivership sale is a court sale, but its terms come from the appointing order and the governing statute rather than from the Bankruptcy Code, so protections that are standard in a § 363 sale (see businesses-and-going-concerns) exist only where a statute or order supplies them.
Federal equity receiverships
Appointment and reach
- Federal Rule of Civil Procedure 66: “These rules govern an action in which the appointment of a receiver is sought or a receiver sues or is sued. But the practice in administering an estate by a receiver or a similar court-appointed officer must accord with the historical practice in federal courts or with a local rule. An action in which a receiver has been appointed may be dismissed only by court order.” (https://www.law.cornell.edu/rules/frcp/rule_66 , retrieved 2026-10-16.)
- A receiver appointed in an action involving property “situated in different districts shall, upon giving bond as required by the court, be vested with complete jurisdiction and control of all such property with the right to take possession thereof,” but must file the complaint and appointment order in each district where property is located within ten days; “[t]he failure to file such copies in any district shall divest the receiver of jurisdiction and control over all such property in that district.” — 28 U.S.C. § 754 (https://www.law.cornell.edu/uscode/text/28/754 , retrieved 2026-10-16).
- A receiver operating a business “shall manage and operate the property in his possession … according to the requirements of the valid laws of the State in which such property is situated, in the same manner that the owner or possessor thereof would be bound to do,” and may be sued “without leave of the court appointing them” for acts in carrying on the business. — 28 U.S.C. § 959(a)–(b) (https://www.law.cornell.edu/uscode/text/28/959 , retrieved 2026-10-16).
Sale procedure: 28 U.S.C. §§ 2001–2004
- Realty. Realty sold under a federal court order “shall be sold as a whole or in separate parcels at public sale at the courthouse of the county … in which the greater part of the property is located, or upon the premises.” Property held by a receiver is sold “in the district wherein any such receiver was first appointed,” unless the court orders sale in an ancillary district. — 28 U.S.C. § 2001(a) (https://www.law.cornell.edu/uscode/text/28/2001 , retrieved 2026-10-16).
- Private sale of realty. After a hearing on notice, the court may order a private sale “if it finds that the best interests of the estate will be conserved thereby.” Before confirmation the court “shall appoint three disinterested persons to appraise such property”; “No private sale shall be confirmed at a price less than two-thirds of the appraised value”; the terms must be published “at least ten days before confirmation”; and “The private sale shall not be confirmed if a bona fide offer is made … which guarantees at least a 10 per centum increase over the price offered in the private sale.” — § 2001(b).
- Notice. A public sale of realty requires notice “published once a week for at least four weeks prior to the sale” in a newspaper of general circulation where the realty is located. — 28 U.S.C. § 2002 (https://www.law.cornell.edu/uscode/text/28/2002 , retrieved 2026-10-16).
- Personalty — the rule that governs most business assets. “Any personalty sold under any
order or decree of any court of the United States shall be sold in accordance with section
2001 of this title, unless the court orders otherwise.” — 28 U.S.C. § 2004
(https://www.law.cornell.edu/uscode/text/28/2004 , retrieved 2026-10-16). In practice the
appointing or sale order therefore controls the process for equipment, inventory,
receivables, intellectual property and equity interests. How often district courts dispense
with § 2001’s appraisal and overbid steps for personalty, and under what standard, was not
surveyed (
needs_verification). - Scope exclusions. Sections 2001, 2002 and 2004 do not apply “to sales and proceedings under Title 11 or by receivers or conservators of banks appointed by the Comptroller of the Currency.” — §§ 2001(c), 2002, 2004.
What a federal receivership sale order can do to liens, unsecured claims and contracts is not
codified in these sections. Whether a federal equity receiver may sell “free and clear” of
liens and, if so, on what showing, is a matter of case law that was not retrieved for this
page (needs_verification). The Bankruptcy Code’s § 363(m) appeal protection and § 365
contract-assignment override do not apply outside bankruptcy.
Pennsylvania — actual chattel orders, not an automatic lien purge
warner-v-conn-pa-1943 concerns court-authorized public sale of printing equipment, next-day confirmation and the owner’s consent. Its proceeds claim belongs in receivership accounting; that is not universal power to strip an absent/objecting lender or a mandatory confirmation rule for every receiver. deangelis-v-commonwealth-land-title-pa-1976 vacates appointment over already levied ceramics/antiques and orders return to the sheriff. The concurrence’s creditor-protection rationale is not the majority’s distinct prerequisite rule.
In the federal channel, the actual post-remand KeyBank/Fleetway order, October 11, 2019 permits vehicle sales free of liens on its depreciating-fleet/equitable- administration record. The July 2019 appeal expressly declined sale authority; it did not affirm the later order. Keep that bounded federal result separate from the unresolved nonconsensual state receiver/title questions in pennsylvania.
State receiverships
States differ in covered property, excluded appointments, transition dates and the interests a court-approved transfer can discharge.
Illinois — the 2026 act also covers personal property and entities
The Illinois Receivership Act, 765ILCS1090, took effect January1,2026 (P.A.104-34). Section4 expressly covers personalty/fixtures and nonindividual persons, not just commercial real estate. Residential real estate and specified other-law receiverships are excluded; do not ignore those qualifications. Section28 excludes receivers appointed before the effective date.
Under §16, an outside-ordinary-course transfer requires court approval. Unless the sale agreement provides otherwise, a sale clears the appointing person’s lien, subordinate liens and redemption rights. Without senior-holder consent, it remains subject to that senior lien/remedies and does not alter the secured obligation. Extinguished liens attach to proceeds at their existing priority. Public auction is not the only permitted method; qualified credit bidding and good-faith/stay protection have their own statutory conditions. See illinois rather than applying this act to every older/special receivership.
Washington — a general receivership statute (RCW ch. 7.60)
- Washington distinguishes a general receiver, with authority “over all of the owner“‘s property, from a custodial receiver over designated property; if the appointment order “does not expressly limit the receiver’s authority to designated property or categories of property of the owner, the receiver is a general receiver.” — RCW 7.60.025(4) (version effective until January 1, 2028) (https://app.leg.wa.gov/RCW/default.aspx?cite=7.60.025 , retrieved 2026-10-16); definitions at RCW 7.60.005 (https://app.leg.wa.gov/RCW/default.aspx?cite=7.60.005 , retrieved 2026-10-16).
- Sales. “The receiver, with the court’s approval after notice and a hearing, may use, sell, or lease estate property other than in the ordinary course of business.” A custodial receiver generally may not sell real property outside the ordinary course. — RCW 7.60.260(1) (https://app.leg.wa.gov/RCW/default.aspx?cite=7.60.260 , retrieved 2026-10-16).
- Free and clear. The court may order a general receiver’s sale “free and clear of liens and of all rights of redemption, whether or not the sale will generate proceeds sufficient to fully satisfy all claims secured by the property,” unless (i) the property is agricultural real property or a homestead and the owner has not consented, or (ii) an owner or lienholder timely objects and the court finds the objector would realize less from the receiver’s sale than “within a reasonable time in the absence of the receiver’s sale.” Liens attach to net proceeds “in the same order, priority, and validity.” — RCW 7.60.260(2).
- Credit bidding. At a public sale, a lienholder with an allowed secured claim “may bid at the sale” and may offset its claim if it “tenders cash sufficient to satisfy in full all secured claims payable out of the proceeds of sale having priority over the secured creditor’s secured claim.” — RCW 7.60.260(3).
- Appeal protection. Reversal or modification on appeal “does not affect the validity of a sale or lease under that authorization to an entity that purchased or leased the property in good faith,” unless stayed pending appeal — RCW 7.60.260(5), the state analogue of 11 U.S.C. § 363(m).
Ohio — receiver’s powers and sale free and clear (Ohio Rev. Code § 2735.04)
- Under the appointing court’s control a receiver may “[s]ell and make transfers of real or personal property.” — Ohio Rev. Code § 2735.04(B)(5) (https://codes.ohio.gov/ohio-revised-code/section-2735.04 , retrieved 2026-10-16).
- “Subject to the approval and supervision of the court … a receiver may sell property free and clear of liens by private sale pursuant to a written contract …, by private auction, by public auction, or by any other method that the court determines is fair …, is reasonable under the circumstances, and will maximize the return from the property.” The court may require valuation evidence, set a minimum bid, require the receiver to solicit additional offers, and pay “the unsuccessful original proposed purchaser a reasonable amount of costs and expenses” to the extent its participation “brought value to the receivership.” — § 2735.04(D)(1)(a)–(c). That last provision is a statutory basis for stalking-horse expense reimbursement in an Ohio receivership.
- For real property the statute adds ten days’ written notice to owners, parties and recorded lienholders, an opportunity for hearing, and, if requested, an order of sale free and clear “of all liens other than the lien of the treasurer of the county … for real estate taxes and assessments” — § 2735.04(D)(2)–(3).
Florida — the Uniform Commercial Real Estate Receivership Act is real-estate-only
Florida enacted the “Uniform Commercial Real Estate Receivership Act” (Fla. Stat. § 714.01, http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0714/Sections/0714.01.html , retrieved 2026-10-16). Its scope is limited: it “applies to a receivership initiated in a court of this state for an interest in real property and any incidental personal property related to or used in operating the real property,” and “does not limit the authority of a court to appoint a receiver under the laws of this state other than this chapter.” — Fla. Stat. § 714.04(1), (3) (http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0714/0714.html , retrieved 2026-10-16). A receivership over an operating business that is not incidental to real property therefore proceeds under other law. Florida’s version restricts sales before judgment: a receiver may sell outside the ordinary course, with court approval after notice to all interested parties (including lienholders) and a hearing, “only if” the owner either expressly consents in writing after the action begins, or fails to object after reasonable advance written notice and the receiver shows the sale is necessary to prevent waste, loss, substantial diminution in value or a voidable transaction (§ 714.16(2)). After judgment, the receiver may sell with court approval to carry the judgment into effect (§ 714.16(3)). The court may order a transfer under the section “free and clear of any liens,” with liens attaching to proceeds “even if the proceeds are not sufficient to satisfy all obligations secured by the liens” (§ 714.16(4)). For a post-judgment transfer under subsection (3), a lienholder may credit bid if it tenders funds for transfer expenses and any senior lien extinguished (§ 714.16(5)), and reversal or modification of the approving order does not affect a good-faith transferee absent a stay (§ 714.16(6)). The act also lets the receiver “adopt or reject an executory contract of the owner relating to receivership property” with court approval (§ 714.17(2)). The act does not apply to receivers appointed before July 1, 2020 (§ 714.28).
Other states have enacted the same uniform act; a secondary-source count was not verified
against each state’s code (needs_verification).
What a buyer from a receiver gets
| Question | Federal equity receiver | Washington general receiver | Ohio receiver | Florida (ch. 714, real estate) |
|---|---|---|---|---|
| Court approval required | Yes (order of sale) | Yes, after notice and hearing (RCW 7.60.260(1)) | Yes (§ 2735.04(D)(1)(a)) | Yes, after notice and hearing; before judgment also owner’s written consent or non-objection plus a necessity showing (§ 714.16(2)) |
| Free and clear of liens | Not codified; needs_verification | Yes, unless an exception applies (RCW 7.60.260(2)) | Permitted where the court-approved sale order so provides (§ 2735.04(D)(1)(a)); not inferred from the appointment alone (ohio 12.5); realty subject to county tax lien | Yes, if ordered (§ 714.16(4)) |
| Credit bid | Not codified | At a public sale, with cash for senior liens (RCW 7.60.260(3)) | Not addressed in retrieved text | Post-judgment transfers, with funds for expenses and senior liens (§ 714.16(5)) |
| Good-faith-purchaser appeal protection | Not codified | Yes (RCW 7.60.260(5)) | Order of sale of realty is “the final appealable order” (§ 2735.04(D)(2)(d)) | Post-judgment transfers under § 714.16(3) (§ 714.16(6)) |
| Contract assignment over objection | No statutory override | Not retrieved | Not retrieved | Adopt or reject only (§ 714.17(2)); no assignment override retrieved |
| Successor liability bar | Not codified | Not retrieved | Not retrieved | Not retrieved |
▸ For Buyers / Operators — Read the appointment order and the sale order, not just the statute: they set what the receiver may sell, on what notice, and free of what. Absent a statute like RCW 7.60.260 or Fla. Stat. § 714.16, assume liens survive unless the order expressly strips them and every lienholder had notice. Contracts, leases and licences pass only on the counterparty’s consent unless the contract itself allows assignment.
▸ For Owners / Debtors — Owners and lienholders receive notice and can object; in Washington an objector can block a free-and-clear sale by showing it would realize more without the sale (RCW 7.60.260(2)(ii)); in Ohio an owner may redeem real property within the period the court sets, not less than three days after the sale order (Ohio Rev. Code § 2735.04(D)(7)). Sale proceeds are distributed under court order.
How jurisdictions diverge
| Pattern | Examples | Notes |
|---|---|---|
| Comprehensive general-receivership statute with free-and-clear power | Washington (RCW ch. 7.60) | Closest to a § 363 sale outside bankruptcy |
| Receiver powers statute with free-and-clear sale | Ohio (§ 2735.04) | Real-property sale procedure detailed; personal property less so |
| Uniform Commercial Real Estate Receivership Act | Florida (ch. 714) and other enacting states (needs_verification) | Real property plus incidental personal property only |
| Federal equity receivership | All federal districts | §§ 2001–2004 procedure; §§ 754, 959 reach and operation; Rule 66 |
Cross-links
businesses-and-going-concerns, bankruptcy-363-sales, assignment-for-the-benefit-of-creditors, ucc-article-9-sales-of-a-business, buying-a-business-at-a-forced-sale, judicial-sale-confirmation, court-ordered-administrative-and-creditor-sales, good-faith-purchaser
needs_verification
- Federal case law on a federal equity receiver’s power to sell personalty free and clear of liens, and on dispensing with § 2001 appraisal/overbid steps for personalty under § 2004.
- Washington RCW 7.60 provisions on executory contracts and on the version of RCW 7.60.025 effective January 1, 2028.
- Ohio § 2735.04 treatment of personal-property sales beyond (D)(1).
- List of states that have enacted the Uniform Commercial Real Estate Receivership Act.
- Successor-liability treatment of buyers at state receivership sales.
Minnesota — express general-receiver sale power has exceptions
Section576.46 permits a court-ordered general-receiver sale free of specified liens/redemption rights; it is not limited to sales yielding full payment. Federal liens, unpaid real-estate taxes/assessments, protected agricultural/homestead ownership, timely objections and the receiver’s comparative-realization burden constrain the power. It does not strip a co-owner’s interest. Transferred liens attach to net proceeds in their existing order, priority and validity. Credit bidding requires cash for approved expenses and senior liens. Good-faith sale protection on appeal depends on the statutory stay rule. Section577.18 incorporates general-receiver powers for the described ABC administration. See minnesota for appointment, notice and adequate-protection context.
Kentucky — commissioner terms differ from sheriff execution
Supreme Court Order2025-48, effective January1,2026, governs referred master-commissioner proceedings, including receiverships. Its judicial-sale rules require cash or a ten-percent deposit/30-day balance with the specified approved surety and judgment interest, a ninety-day referral deadline subject to the limited good-cause extension, and a report within three business days. Inconsistent local practice cannot override it. These are not sheriff execution’s separate three-month-credit terms. CR53.05is the current report/objection rule; the real-property deed deadline is not a universal chattel-title deadline. See kentucky for actual referral forms, fees and notice requirements.
Nevada — personalty power is not limited to the real-estate act
NRS78.700 and 86.5424 conditionally allow the insolvent corporation/LLC receiver to sell clear of encumbrances where the specified lien legality is questioned or the property will materially deteriorate pending litigation. Public/private sale proceeds go into court subject to the same liens/equities; an actual court order remains required. This is affirmative statutory power beyond a real-estate-only description, not blanket authority for every receiver sale. Nonprofit §§82.476/.496have their own incorporated powers and charitable-residue limits. See nevada.
Nevada’s separate UCRERA sale rule32.315 also contains its sale-agreement qualification; do not assume every preexisting sale agreement is automatically enforceable by every receiver or that this real-property-related act replaces the entity-specific personalty powers.
Washington — current CR66points to the statute
Current CR66 is reserved and refers to chapter7.60. Use RCW7.60.260’s notice/hearing approval and the actual sale order, not superseded CR66sale procedures or automatic sheriff-realty confirmation. A receiver sale’s conveyance and lien treatment must be evaluated under that governing power and federal limits. See washington for the complete statutory conditions.
Kansas — disputed lien AND deteriorating property
17-6907 requires both a genuinely disputed corporate lien and property that will deteriorate pending the litigation. Court-ordered public/private sale may then be clear of encumbrances, with net proceeds held subject to court direction. Akers requires evidence, not a bare allegation or appointment alone. This Kansas conjunction differs from Nevada’s alternative disputed-lien OR material-deterioration rule; neither is a universal receivership title purge.
Iowa — specific authorization, notice and confirmation
parks-v-carlisle-clay-products-1937 upheld the specifically authorized and confirmed corporate-asset sale free of affected creditors’ liens, with those liens transferred to proceeds. Adequate notice, above-appraisal price and lack of prejudice/fraud mattered. It expressly left the collateral-attack question undecided; it is not blanket power over unserved strangers or approval of every appraiser’s purchase. Chapter680 supplies Iowa’s court-controlled receiver framework. Appointment alone does not cleanse title; obtain the actual authorization, notices, lien-treatment and confirmation orders. Tax/wage/federal priorities still require the actual distribution law. See iowa and the full case for their distinct scopes.
Sources
- {court rule, https://www.law.cornell.edu/rules/frcp/rule_66, retrieved 2026-10-16} — Fed. R. Civ. P. 66.
- {statute, https://www.law.cornell.edu/uscode/text/28/754, retrieved 2026-10-16} — 28 U.S.C. § 754.
- {statute, https://www.law.cornell.edu/uscode/text/28/959, retrieved 2026-10-16} — 28 U.S.C. § 959.
- {statute, https://www.law.cornell.edu/uscode/text/28/2001, retrieved 2026-10-16} — 28 U.S.C. § 2001.
- {statute, https://www.law.cornell.edu/uscode/text/28/2002, retrieved 2026-10-16} — 28 U.S.C. § 2002.
- {statute, https://www.law.cornell.edu/uscode/text/28/2004, retrieved 2026-10-16} — 28 U.S.C. § 2004.
- {statute, https://app.leg.wa.gov/RCW/default.aspx?cite=7.60.005, retrieved 2026-10-16} — RCW 7.60.005.
- {statute, https://app.leg.wa.gov/RCW/default.aspx?cite=7.60.025, retrieved 2026-10-16} — RCW 7.60.025.
- {statute, https://app.leg.wa.gov/RCW/default.aspx?cite=7.60.260, retrieved 2026-10-16} — RCW 7.60.260.
- {statute, https://codes.ohio.gov/ohio-revised-code/section-2735.04, retrieved 2026-10-16} — Ohio Rev. Code § 2735.04.
- {statute, http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0714/0714.html, retrieved 2026-10-16} — Fla. Stat. ch. 714 (§§ 714.01, 714.04, 714.16, 714.17, 714.28) (2026).
▸ For Buyers / Operators — The order is the title document; see the comparison table and buying-a-business-at-a-forced-sale.
▸ For Owners / Debtors — Objection, redemption and proceeds rights are set by statute and by the appointing court’s orders.
This page provides general legal information, not legal advice. Receivership law is technical, changes, and varies by court and state; its application is fact-specific. Nothing here creates an attorney-client relationship. Verify every statute, rule and holding against the current primary source and consult a licensed attorney before acting. Last verified: 2026-10-16.