Illinois § 16

§ 16.

Use or transfer of receivership property not in ordinary course of business. (a) In this Section, "good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing. (b) With court approval, a receiver may use receivership property other than in the ordinary course of business. (c) With court approval, a receiver may transfer receivership property other than in the ordinary course of business by sale, lease, license, exchange, or other disposition. Unless the agreement of sale provides otherwise, a sale under this Section is free and clear of a lien of the person that obtained appointment of the receiver, any subordinate lien, and any right of redemption. However, unless the holder of a senior lien consents, such a sale: (1) is subject to the senior lien and to the rights and remedies of the holder of the senior lien under law other than this Act; and (2) does not affect the obligation secured by the senior lien. (d) A lien on receivership property which is extinguished by a transfer under subsection (c) attaches to the proceeds of the transfer with the same validity, perfection, and priority the lien had on the property immediately before the transfer, even if the proceeds are not sufficient to satisfy all obligations secured by the lien. (e) A transfer under subsection (c) may occur by means other than a public auction sale. A creditor holding a valid lien on the property to be transferred may purchase the property and offset against the purchase price part or all of the allowed amount secured by the lien, if the creditor tenders funds sufficient to satisfy in full the reasonable expenses of transfer and the obligation secured by any senior lien extinguished by the transfer. (f) A reversal or modification of an order approving a transfer under subsection (c) does not affect the validity of the transfer to a person that acquired the property in good faith or revive against the person any lien extinguished by the transfer, whether the person knew before the transfer of the request for reversal or modification, unless the court stayed the order before the transfer. (Source: P.A. 104-34, eff. 1-1-26.)