Senate Bill 181- Receivership Bill
A bill was introduced in the 2015 Colorado legislature that would have fundamentally changed how receivership proceedings are handled in Colorado. Among other things, if enacted, the bill as originally proposed would have:
- increased the burden of proof on the party seeking the appointment of a receiver from the typical civil standard of “preponderance of the evidence,” to the stricter “clear and convincing evidence” standard;
- required expedited consideration of requests to appoint and remove receivers at both the trial and appellate court levels;
- provided that a receiver would be automatically discharged if the trial court failed to rule in a timely fashion on a motion involving the receiver’s appointment (including motions not seeking to discharge a receiver, but merely to remove and replace a receiver!);
- made the receivership estate responsible for all costs related to the appeal of any order appointing or removing a receiver; and
- applied, retroactively, to all pending receivership proceedings.
Very troubling to us was the fact that this bill was proposed only because one politically influential constituent complained to his legislator about the outcome of a receivership proceeding, even though our review of the pleadings in that case revealed that the case had been handled appropriately by the receiver, and that the outcome was a result of the constituent’s own actions to the detriment of his business partners. The bill proponents made no apparent effort to understand receivership law or to consider the broader impact their proposed changes might have on receivership proceedings which have been conducted in Colorado since it was a territory without the need for such a statute, prior to introducing the bill.
We were very concerned about the impact this bill would have on those clients who may seek the appointment of a receiver, and our clients who serve as receivers. In order to oppose this bill in an effective manner, we worked pro bono to coordinate testimony in opposition to the bill by all affected constituencies, including from individuals who serve as receivers, parties who have benefited from the appointment of receivers, the bankers’ associations who represent the interests of lenders, relevant bar associations, and the state Division of Regulatory Authorities. We also lobbied behind the scenes, and coordinated with other lobbyists. Our efforts were successful, resulting in the bill being killed in committee.