2019 Maryland Code
Commercial Law
Title 24 - Maryland Commercial Receivership Act.
Subtitle 2 - Appointment of Receiver.
§ 24-203. Disqualification.

    (a)    A court may not appoint a person as a receiver unless the person provides a statement under penalty of perjury that the person is not disqualified under subsection (b) of this section.

    (b)    Except as otherwise provided in subsection (c) of this section, a person is disqualified from appointment as a receiver if the person:

        (1)    Is an affiliate of a party;

        (2)    Has a material financial interest in the outcome of the action, other than compensation the court may allow the receiver;

        (3)    Has a debtor–creditor relationship with a party;

        (4)    Holds an equity interest in a party, other than a noncontrolling interest in a publicly traded company;

        (5)    Is or was a director, an officer, or an employee of the owner within 2 years immediately preceding the appointment of the receiver;

        (6)    (i)    Has been convicted of a felony or any other crime involving moral turpitude; or

            (ii)    Is supervised by or an employee of a person who has been convicted of a felony or any other crime of moral turpitude;

        (7)    (i)    Has been found liable in civil court for fraud, breach of fiduciary duty, theft, or similar misconduct; or

            (ii)    Is controlled by a person who has been found liable in civil court for fraud, breach of fiduciary duty, theft, or similar misconduct; or

        (8)    Otherwise has an interest materially adverse to an interest of a party or the receivership estate, or of any creditor or equity security holder, by reason of any direct or indirect relationship to, connection with, or interest in the owner.

    (c)    (1)    A person is not disqualified from appointment as a receiver solely because the person:

            (i)    Was appointed as a receiver of another receivership;

            (ii)    Is owed compensation in an unrelated matter involving a party;

            (iii)    Was engaged by a party in a matter unrelated to the receivership;

            (iv)    Is an individual obligated to a party on a debt that:

                1.    Is not in default; and

                2.    Was incurred primarily for personal, family, or household purposes; or

            (v)    Maintains with a party a deposit account as defined in § 9–102(a)(29) of this article.

        (2)    Notwithstanding subsection (b)(5) of this section, a person who is or was a director, an officer, or an employee of the owner within 2 years immediately preceding the appointment of the receiver is not disqualified from appointment as a receiver if the court:

            (i)    Appoints the person as a receiver; and

            (ii)    Determines that:

                1.    The appointment would be in the best interest of the receivership estate; and

                2.    The person is not disqualified for a reason listed in subsection (b)(1) through (4) or (b)(6) through (8) of this section.

    (d)    (1)    A person seeking appointment of a receiver may nominate a person to serve as receiver.

        (2)    A court is not bound by a nomination received under paragraph (1) of this subsection.

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