§ 1-507.40. Turnover of receivership property.

311 words·~1 min read·/nc/chapter-1/1-507-40

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)Demand by Receiver. - Except as expressly provided in this section, and unless otherwise ordered by the court, upon demand by a receiver:

(i)subject to subsection

(b)of this section, any person shall turn over to the receiver any receivership property that is within the possession, custody, or control of that person and

(ii)any person that owes a debt that is receivership property and is matured or payable on demand or on order shall pay the debt to or on the order of the receiver, except to the extent that the debt is subject to setoff or recoupment.

(b)Adequate Protection. - If a creditor has possession, custody, or control of receivership property and the validity, perfection, or priority of the creditor's lien on or interest in the property depends on the creditor's possession, custody, or control, the creditor may retain possession, custody, or control until the court orders adequate protection of the creditor's lien.

(c)Turnover Motion by Receiver. - A receiver may seek to compel turnover of receivership property required by clause

(i)of subsection

(a)of this section by motion in the receivership. If there exists a bona fide dispute with respect to the existence or nature of the receiver's or the debtor's interest in the receivership property, turnover shall be sought by means of an action under G.S. 1-507.38. Unless a bona fide dispute exists about a receiver's right to possession, custody, or control of receivership property, the court may sanction as civil contempt a person's failure to turn over the property when required by this section.

(d)Payment Only to Receiver. - A person that has notice of the appointment of a receiver and owes a debt that is receivership property shall not satisfy the debt by payment to the debtor. (2020-75, s. 1; 2021-93, s. 6.)