31A-27a-501 - Turnover of assets.
31A-27a-501. Turnover of assets.
(1) (a) If the receiver determines that funds or property in the possession of anotherperson are rightfully the property of the estate, the receiver shall deliver to the person a writtendemand for immediate delivery of the funds or property:
(i) referencing this section by number;
(ii) referencing the court and docket number of the receivership action; and
(iii) notifying the person that any claim of right to the funds or property by the personshall be presented to the receivership court within 20 days of the day on which the personreceives the written demand.
(b) (i) A person who holds funds or other property belonging to an entity subject to anorder of receivership under this chapter shall deliver the funds or other property to the receiver ondemand.
(ii) If the person described in Subsection (1)(b)(i) alleges a right to retain the funds orother property, the person shall:
(A) file a pleading with the receivership court setting out that right within 20 days of theday on which the person receives the demand that the funds or property be delivered to thereceiver; and
(B) serve a copy of the pleading on the receiver.
(iii) The pleading described in Subsection (1)(b)(ii) shall inform the receivership court asto:
(A) the nature of the claim to the funds or property;
(B) the alleged value of the property or amount of funds held; and
(C) what action has been taken by the person to preserve any funds or to preserve andprotect the property pending determination of the dispute.
(c) The relinquishment of possession of funds or property by a person who receives ademand pursuant to this section is not a waiver of a right to make a claim in the receivership.
(2) (a) If requested by the receiver, the receivership court shall hold a hearing todetermine where and under what conditions the funds or property shall be held by a persondescribed in Subsection (1) pending determination of a dispute concerning the funds or property.
(b) The receivership court may impose the conditions the receivership court considersnecessary or appropriate for the preservation of the funds or property until the receivership courtcan determine the validity of the person's claim to the funds or property.
(c) If funds or property are allowed to remain in the possession of the person afterdemand made by the receiver, that person is strictly liable to the estate for any waste, loss, ordamage to or diminution of value of the funds or property retained.
(3) If a person files a pleading alleging a right to retain funds or property as provided inSubsection (1), the receivership court shall hold a subsequent hearing to determine theentitlement of the person to the funds or property claimed by the receiver.
(4) If a person fails to deliver the funds or property or to file the pleading described bySubsection (1) within the 20-day period, the receivership court may issue a summary order:
(a) upon:
(i) petition of the receiver; and
(ii) a copy of the petition being served by the petitioner to that person;
(b) directing the immediate delivery of the funds or property to the receiver; and
(c) finding that the person waived all claims of right to the funds or property.
(5) The liquidator shall reduce the assets to a degree of liquidity that is consistent withthe effective execution of the liquidation.
Enacted by Chapter 309, 2007 General Session