Texas Laws - Business and Commerce Code
BUSINESS AND COMMERCE CODE
TITLE 2. COMPETITION AND TRADE PRACTICES

Sec. 22.004. INFORMATION FROM WINNING BIDDER. (7344)(1-click HTML)

(a) A winning bidder at a sale, other than the foreclosing mortgagee or mortgage servicer, shall provide the following information to the trustee or substitute trustee at the time the trustee or substitute trustee completes the sale: (7345)

(1) the name, address, telephone number, and e-mail address of the bidder and of each individual tendering or who will tender the sale price for the winning bid; (7346)

(2) if the bidder is acting on behalf of another individual or organization, the name, address, telephone number, and e-mail address of the individual or organization and the name of a contact person for the organization; (7347)

(3) the name and address of any person to be identified as the grantee in a trustee's or substitute trustee's deed; (7348)

(4) the purchaser's tax identification number; (7349)

(5) a government-issued photo identification to confirm the identity of each individual tendering funds for the winning bid; and (7350)

(6) any other information reasonably needed to complete the trustee's or substitute trustee's duties and functions concerning the sale. (7351)

(b) If a winning bidder required to provide information under Subsection (a) fails or refuses to provide the information, the trustee or substitute trustee may decline to complete the transaction or deliver a deed. (7352)

Added by Acts 2017, 85th Leg., R.S., Ch. 1012 (H.B. 1470), Sec. 1, eff. September 1, 2017. (7353)

Sec. 22.005. RECEIPT AND DEED. (7354)(1-click HTML)

The trustee or substitute trustee shall: (7355)

(1) provide the winning bidder with a receipt for the sale proceeds tendered; and (7356)

(2) except when prohibited by law, within a reasonable time: (7357)

(A) deliver the deed to the winning bidder; or (7358)

(B) file the deed for recording. (7359)

Added by Acts 2017, 85th Leg., R.S., Ch. 1012 (H.B. 1470), Sec. 1, eff. September 1, 2017. (7360)

Sec. 22.006. SALE PROCEEDS. (7361)(1-click HTML)

(a) The trustee or substitute trustee shall ensure that funds received at the sale are maintained in a separate account until distributed. The trustee or substitute trustee shall cause to be maintained a written record of deposits to and disbursements from the account. (7362)

(b) The trustee or substitute trustee shall make reasonable attempts to identify and locate the persons entitled to all or any part of the sale proceeds. (7363)

(c) In connection with the sale and related post-sale actions to identify persons with legal claims to sale proceeds, determine the priority of any claims, and distribute proceeds to pay claims, a trustee or substitute trustee may receive: (7364)

(1) reasonable actual costs incurred, including costs for evidence of title; (7365)

(2) a reasonable trustee's or substitute trustee's fee; and (7366)

(3) reasonable trustee's or substitute trustee's attorney's fees. (7367)

(d) A fee described by Subsection (c): (7368)

(1) is considered earned at the time of the sale; (7369)

(2) may be paid from sale proceeds in excess of the payoff of the lien being foreclosed; and (7370)

(3) is conclusively presumed to be reasonable if the fee: (7371)

(A) is not more than the lesser of 2.5 percent of the sale proceeds or $5,000, for a trustee's or substitute trustee's fee; or (7372)

(B) is not more than 1.5 percent of the sale proceeds, for trustee's or substitute trustee's attorney's fees incurred to identify persons with legal claims to sale proceeds and determine the priority of the claims. (7373)

(e) A trustee or substitute trustee who prevails in a suit based on a claim that relates to the sale and that is found by a court to be groundless in fact or in law is entitled to recover reasonable attorney's fees necessary to defend against the claim, which may be paid from the excess sale proceeds, if any. (7374)

(f) Nothing in this section precludes the filing of an interpleader action or the depositing of funds in a court registry. (7375)

Added by Acts 2017, 85th Leg., R.S., Ch. 1012 (H.B. 1470), Sec. 1, eff. September 1, 2017. (7376)

TITLE 3. INSOLVENCY, FRAUDULENT TRANSFERS, AND FRAUD (7377)(1-click HTML)

CHAPTER 23. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS (7378)(1-click HTML)

Sec. 23.01. DEFINITIONS. (7379)(1-click HTML)

In this chapter, unless the context requires a different definition, (7380)

(1) "assigned estate" means all the real and personal estate of an assigning debtor passing to the consenting creditors under an assignment by virtue of Section 23.02 or 23.09(b) of this code; (7381)

(2) "assignee" means an assignee for the benefit of creditors; (7382)

(3) "assigning debtor" means a person executing an assignment; (7383)

(4) "assignment" means a general assignment for the benefit of creditors made under this chapter; (7384)

(5) "consenting creditor" means a creditor who has consented to an assignment in one of the ways provided by Section 23.30 of this code; and (7385)

(6) "real and personal estate" does not include property exempt by law from execution. (7386)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7387)

Sec. 23.02. NATURE AND EFFECT OF ASSIGNMENT. (7388)(1-click HTML)

(a) A debtor may assign his real and personal estate under this chapter to an assignee for the benefit of the debtor's creditors. (7389)

(b) An assigning debtor shall provide in the assignment for distribution of all his real and personal estate to each consenting creditor in proportion to each consenting creditor's claim. (7390)

(c) Regardless of an expression to the contrary, an assignment passes all an assigning debtor's real and personal estate to each consenting creditor in proportion to each consenting creditor's claim. (7391)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7392)

SUBCHAPTER B. THE ASSIGNMENT (7393)(1-click HTML)
Sec. 23.08. FORM AND CONTENT OF ASSIGNMENT. (7394)(1-click HTML)

(a) For an assignment to be valid, (7395)

(1) the assigning debtor must make the assignment in writing; and (7396)

(2) it must be proved or acknowledged and recorded in the manner provided by law for the conveyance of real estate. (7397)

(b) The assigning debtor shall attach to his assignment an inventory containing the following information: (7398)

(1) a list naming each creditor of the assigning debtor; (7399)

(2) the resident address, if known, of each creditor; (7400)

(3) the amount owed each creditor and the type of debt; (7401)

(4) the consideration for the debt and the place where the debt arose; (7402)

(5) a description of each existing judgment or security for the payment of the debt; (7403)

(6) a schedule of all the assigning debtor's real and personal estate at the date of the assignment; (7404)

(7) a description of (7405)

(A) each encumbrance on the real and personal estate; and (7406)

(B) each voucher and security relating to the estate; and (7407)

(8) the value of the estate. (7408)

(c) The assigning debtor shall sign the inventory required by Subsection (b) of this section and swear that it is just and true. (7409)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7410)

Sec. 23.09. FRAUD DOES NOT DEFEAT ASSIGNMENT. (7411)(1-click HTML)

(a) An assignment is not affected and a consenting creditor is not deprived of his proportionate share of the assigned estate by the fraudulent act or intent of the assigning debtor or assignee. A consenting creditor is a proper party to a suit filed to enforce a right under an assignment, or to protect an interest in an assigned estate. (7412)

(b) Except as to an innocent purchaser for value, a transfer of property made in contemplation of an assignment with an intent to defeat, delay, defraud, or give preference to a creditor is void and the property passes under the assignment rather than by the transfer. (7413)

(c) An assignee may sue to recover property transferred with an intent described in Subsection (b) of this section, and when the property is recovered, the assignee shall apply it for the benefit of the assigning debtor's creditors along with property belonging to the assigned estate already in the assignee's possession. If an assignee neglects or refuses to sue to recover property transferred with an intent described in Subsection (b) of this section, a creditor, after securing the assignee against cost or liability, may sue in the assignee's name to recover the property. (7414)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7415)

Sec. 23.10. ASSIGNMENT DISCHARGES DEBTOR. (7416)(1-click HTML)

If an assigning debtor makes an assignment, he is discharged from liability on the claim of a consenting creditor unless the consenting creditor does not receive at least one-third of the amount allowed on his claim against the assigned estate. (7417)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7418)

SUBCHAPTER C. DUTIES AND RIGHTS OF ASSIGNEE (7419)(1-click HTML)
Sec. 23.16. ASSIGNEE'S QUALIFICATIONS, DUTY TO RECORD ASSIGNMENT, AND BOND. (7420)(1-click HTML)

(a) An assignee shall be a resident of this state and a resident of the county in which the assigning debtor resides, or in which the assigning debtor's principal business was conducted. (7421)

(b) Immediately after the assignment instrument is executed and delivered to him, the assignee shall record it in the county of his residence and in each county in which there is real property conveyed to the assignee by the assignment. (7422)

(c) Within five days after delivery to him of the assignment instrument, the assignee shall execute a bond (7423)

(1) with a surety who must be approved by the judge of either the county or district court in the county of the assignee's residence; (7424)

(2) conditioned that he will perform faithfully his duties as assignee and distribute proportionately the net proceeds of the assigned estate to the consenting creditors entitled to it under the assignment; (7425)

(3) in an amount fixed by the county or district judge; (7426)

(4) payable to the state; and (7427)

(5) which inures to the benefit of the assigning debtor and each of the creditors. (7428)

(d) The assignee shall file the bond with the county clerk of the county in which the assigning debtor resides and then the assignee shall take possession of the assigned estate and carry out the assignment. (7429)

(e) An assignment is valid as against an assigning debtor or his creditors even though the assignee fails to execute and file a bond as required by Subsections (c) and (d) of this section. (7430)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7431)

Sec. 23.17. NOTICE OF ASSIGNEE'S APPOINTMENT. (7432)(1-click HTML)

(a) Within 30 days after an assignment is executed, the assignee shall publish notice of his appointment as assignee in a newspaper published in the county (7433)

(1) where the assigning debtor resides or where he operated his principal business before the assignment; or (7434)

(2) nearest the assigning debtor's residence or principal business if a newspaper is not published in the county of the assigning debtor's residence or principal business. (7435)

(b) The assignee shall publish notice of his appointment as assignee once each week for three consecutive weeks. (7436)

(c) The assignee shall notify by mail each of the assigning debtor's listed creditors of his appointment as assignee. (7437)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7438)

Sec. 23.18. REPLACEMENT OF ASSIGNEE. (7439)(1-click HTML)

(a) A county or district court of the county in which the assignee resides shall remove or replace the assignee on application of the assigning debtor or a creditor, or on its own motion, (7440)

(1) if the court is satisfied that the assignee has not executed and filed the bond required by Sections 23.16(c) and (d) of this code; (7441)

(2) if the assignee refuses or fails to serve for any reason; or (7442)

(3) for good cause. (7443)

(b) On removal, resignation, or death of the assignee, the court shall appoint in writing a new assignee in term time or vacation. (7444)

(c) As soon as the new assignee executes and files a bond as required by Sections 23.16(c) and (d) of this code, he shall take possession of the assigned estate and carry out the assignment. (7445)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7446)

Sec. 23.19. ASSIGNEE'S DUTY TO DISTRIBUTE ASSIGNED ESTATE. (7447)(1-click HTML)

Each time an assignee has enough money to pay 10 percent of the assigning debtor's debts, he shall distribute the money among the creditors entitled to receive it in proportion to their claims allowed under Section 23.31(b) of this code. (7448)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7449)

Sec. 23.20. DISCOUNT OF CLAIM NOT DUE AND ALLOWANCE OF SECURED CLAIM. (7450)(1-click HTML)

(a) The assignee may allow a claim which is not due at its present value by discounting it at the legal rate. (7451)

(b) If a creditor holds collateral to secure his claim worth less than his claim, the assignee may estimate the value of the collateral and allow the creditor as a claim against the assigned estate only the difference between the value of the collateral and the amount of the claim. (7452)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7453)

Sec. 23.21. ASSIGNEE'S ENTITLEMENT TO COMPENSATION. (7454)(1-click HTML)

An assignee is entitled to reasonable compensation for his services and reimbursement for his necessary expenses, including an attorney's fee, all of which shall be fixed by the county or district court who approved his bond. The compensation, expenses, and attorney's fee fixed by the county or district court shall be paid out of the assigned estate. (7455)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7456)

Sec. 23.22. EXAMINATION OF DEBTOR OR OTHER PERSON. (7457)(1-click HTML)

(a) The court in which a proceeding involving an assigned estate has been filed may, after reasonable notice to each person concerned, compel any person to answer questions under oath on (7458)

(1) application of a creditor of the assigning debtor; or (7459)

(2) its own motion. (7460)

(b) The court may compel attendance and an answer to any question concerning the assigned estate by writ or order as in other cases. Questions asked and answers given during the examination shall be in writing, the person examined shall swear to and sign his answers before the clerk, and the questions and answers shall be filed with the clerk for use by anyone interested in the proceeding. (7461)

(c) The court shall charge the cost of the examination against the applicant or the assigned estate, as the court deems proper. (7462)

(d) The assigning debtor may not be prosecuted or punished for an answer given by him during the examination. (7463)

Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1. (7464)

Sec. 23.23. ASSIGNEE'S FINAL REPORT AND DISCHARGE. (7465)(1-click HTML)

(a) An assignee wishing to be discharged from his appointment shall prepare and file for record with the county clerk of the county in which his assignment is recorded a sworn report describing (7466)

(1) all property which came into his possession under the assignment; and (7467)

  

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