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Rule 66 – Receivers.

May 14, 2021 | Civil Procedure, Rhode Island

(a) Number of Receivers. Ordinarily but one (1) receiver shall be appointed upon application for the appointment of a receiver, and, unless special exigencies shall appear, such receiver shall be a resident of this state.
(b) Appointment of Temporary Receiver. A temporary receiver shall not be appointed ex parte except upon a showing in writing by the applicant under oath, accompanied by the certificate of the applicant’s attorney, satisfactory to the court, that the application is made in good faith for the protection of the business property or assets affected by such appointment; that facts be set forth justifying the appointment of a receiver and the appointment of a temporary receiver is desirable to protect the status quo pending final hearing for the appointment of a receiver. Before acting upon an application for the appointment of a temporary receiver the court may call in for consultation, so far as practicable, all the interested parties or their attorneys, or the court may in its discretion set down the matter of the appointment of a temporary receiver at as early a date as is practicable, with such notice as the court may order.

If an application for the ex parte appointment of a temporary receiver is made to and denied by one (1) judicial officer of the court such application shall not be again made to any other judicial officer unless there is a material change in circumstances. The judicial officer to whom such application was originally presented shall note the judicial officer’s action in the case file containing such application.

(c) Counsel to Receiver. A receiver may employ such counsel as may be approved by the court upon written application by receiver after such notice as the court may in its discretion require; provided, however, that except for cause shown the court will not approve the employment:

(1) Of counsel by a receiver when the receiver is a member of the Rhode Island bar; or
(2) Of more than one attorney or firm as counsel even though there be more than one receiver.
(d) Form of Decree. The decree appointing a permanent receiver shall include, among other matters, orders with respect to the operation of the business by the receiver if such operation is sought, and shall definitely fix:

(1) Filing of an inventory by the receiver;
(2) Filing of statements of assets and financial condition of the receivership;
(3) The filing of reports respecting creditors, debtors and claimants; and
(4) The time within which creditors and claimants shall file their claims.

The court may in its discretion require that a decree appointing a temporary receiver shall include the matters provided for in this rule, and in every case where a temporary receivership shall have continued for a period of more than thirty (30) days a decree shall be entered in accordance with the provisions of this rule.

(e) Reports of Condition. Reports shall be filed in court by the receiver, unless otherwise ordered, every thirty (30) days, setting forth the financial condition of the receivership and, in case the receiver is operating the business, the receiver’s recommendations as to its further continuance, and, if the receiver is not operating the business, the receiver’s recommendations as to the disposition of the assets. The court may, upon application duly made, order that these reports be sealed and be opened and subject to inspection only upon application to the court.
(f) Filing of Claims; Reports Thereon. Each creditor or claimant shall, before a day certain to be fixed by the court in each case, in the decree appointing the receiver, file with the receiver a statement of the creditor’s or claimant’s claim, which statement shall set out the address, the nature and amount of such claim and of any security or lien held by the creditor or claimant to which the creditor or claimant is or claims to be entitled and also any claim to preference or priority in payment to any other creditor or claimant.

The receiver shall file a report recommending the allowance or disallowance, in whole or in part, of all claims filed with the receiver within a reasonable time after the period fixed by the court for filing claims shall have expired and a suitable order shall be included in the decree appointing a receiver requiring such a report. Upon filing such report the receiver shall give due notice of such filing and of the hearing assigned or such other notice as may be ordered, to each creditor and other party in interest and shall include in such notice to any creditor a statement as to the disposition recommended by said report of the claim of such creditor.

(g) Failure to Report; Notification of Court. It shall be the duty of the clerk to inform the court of the failure of a temporary receiver or receivers to file such reports as may from time to time be called for by the court either under a rule of court or in the original order or decree of appointment or in any subsequent order or decree. Such failure to so report shall be a matter for investigation and for appropriate action by the court acting upon its own initiative, whether or not complaint is made by any party in interest.
(h) Continuance of Business. The court will order the continuance of the business of a corporation or partnership for which a receiver is appointed only when the complaint or petition contains a prayer to this effect or upon an application in writing by any party in interest and upon cause being shown. Notice to all interested parties of the pendency of a complaint or petition for receivership shall set forth that a continuance of the business is sought in the proceedings.
(i) Allowance of Fees. Allowances of fees to a receiver and the receiver’s counsel, either on account or in full, shall only be made on hearing after such notice as the court shall order. Failure to comply with any order of the court may, unless explained to the satisfaction of the court, be a ground for refusing compensation to such receiver and the receiver’s attorney entirely or for diminishing the amount of such allowances.
(j) Dismissal of Receivership Action. An action in which a receiver has been appointed shall not be dismissed except by order of the court.

R.I. Super. Ct. R. Civ. P. 66