All Roll Calls
Yes: 234 • No: 1
IllinoisHB0028104th General Assembly (2025–2026)House
ILLINOIS RECEIVERSHIP ACT
Sponsored By: Sponsor information unavailable
Signed by Governor
Summary
Creates the Illinois Receivership Act. Creates a process in which a person is appointed by the court as the court's agent under the court's direction to take possession of, manage and, if authorized by the Act or court order, transfer, sell, lease, or otherwise dispose of receivership property. Provides criteria for a court to provide notice and opportunity for a hearing as appropriate before the court can issue an order under the Act. Applies to real property and any personal property related to or used in operating the real property, personal property and fixtures, and other business assets such as corporations, limited liability companies and trusts among other things. Provides that this Act does not apply to (i) an interest in real property improved by one to six dwelling units with some exceptions; (ii) a receiver that is a governmental unit or an individual acting in an official capacity on behalf of the governmental unit unless the unit elects for this Act to apply; and (iii) a receiver appointed under the Illinois Mortgage Foreclosure Law. Defines terms. Provides for the powers and duties of a receiver, disqualification of a receiver, the status of a receiver as lien holder, duties of an owner, powers of the court in managing a receivership, and defenses and immunities of a receiver. Makes other changes.
judiciary - civilassignmentsjudiciary
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Bill Overview
Analyzed Economic Effects
11 provisions identified: 2 benefits, 1 costs, 8 mixed.
Qualifying renters keep primary-home lease protections
A receiver cannot reject an unexpired primary-home lease when someone other than a mortgage lender requested the receiver. When a mortgage lender requested appointment, the lease is protected if it ranks ahead of the mortgage. Protection also applies with an enforceable agreement against disturbance, lender consent, or the lender's failure to object on time. Another protection covers commercially reasonable leases when tenants neither knew nor had reason to know the lease violated the mortgage.
Safeguards for property under court management
Receivers must swear they are eligible; specified conflicts, financial ties, sheriff service, or legal bars prevent appointment. Some unrelated work, nondefault personal debts, and deposit accounts alone do not disqualify them. Receivers generally must post a court-approved bond, though courts can approve other security, waive it for good cause, or allow earlier action. Receivership property cannot serve as alternative security; interest on deposited security goes to the receiver upon discharge. Receivers must keep records through discharge, account for property, disclose disqualifying facts, and follow court orders. They must promptly record a real-estate notice identifying the receiver, owner, case, and property, with the appointment order attached; this legally alerts later buyers and lienholders.
Court permission required to sue receivers
Parties need court approval to sue receivers or their hired professionals over administration of receivership property. A court order is also required to obtain evidence from the receiver about that administration. Receivers retain Illinois-law defenses and immunities for acts within their appointment.
Contract partners face court-approved contract changes
With court approval, receivers can keep or reject owners' contracts with remaining duties tied to receivership property. Unresolved contracts count as rejected when the receivership ends; rejection ends the receiver's use rights and counts as a breach immediately before appointment. Rejection-damage claims face the receivership claim deadline or a deadline 30 days after approval of rejection. Court-approved assignments must follow contract terms and be allowed under Illinois law. For covered property-sale contracts, buyers in possession can end the deal and claim a lien for payments, or stay and continue performing while offsetting specified damages. The law also provides these purchaser protections for covered real-property timeshare interests.
Creditors face deadlines for receivership payouts
Receivers must notify creditors and set a filing deadline at least 60 days after notice for claims arising before appointment. Claims must meet proof requirements; late claims cannot receive payouts unless the court orders otherwise. Claim transfers bind the receiver only with timely notice before approval of the final report. If property likely cannot cover perfected liens, the court can limit notice and excuse unsecured creditors from filing.
Creditors face pauses on property collection
A receiver's appointment generally pauses actions to take or control the property, enforce judgments against it, or enforce preappointment liens. Applicable deadlines pause too, and courts can block related actions to protect the receivership. Exceptions include specified lien-perfection actions, criminal cases, nonmonetary government enforcement, establishing tax liabilities, and specified financial-contract rights. Parties can request relief, including when their property interests lack adequate protection. Courts can void violations; knowing violations can lead to actual damages, attorney's fees, costs, or civil contempt.
Lien priority shapes creditors' property payouts
Appointment gives receivers lien-creditor status over personal property and fixtures, affecting their standing against competing claims. For real estate, that status applies to parties with notice; recording extends the effect to others. Earlier security agreements still cover qualifying later-acquired property unless another Illinois law says otherwise. Subject to receivership expense rules, creditors with perfected liens receive payment in their legal priority order. Allowed unsecured creditors receive proportional payments as the court directs, and owners receive leftovers only after all creditor claims are paid in full.
New court control rules for property
The law sets rules for court-appointed receivers who manage property or businesses during legal disputes. It covers real estate, personal property, fixtures, and nonindividual entities, but excludes residential real estate and specified other proceedings. Exclusions include receiverships under specified banking, financial-service, mortgage-foreclosure, and nursing-home laws; government units can opt in when other law allows. Courts can appoint receivers to protect threatened property, enforce judgments, address business deadlock, fraud, or insolvency, or protect loan collateral. To prevent irreparable harm, courts can act without advance notice or a hearing and can require security for damages and costs. The law does not cover receivers appointed before its effective date.
Owners must surrender property and records
Owners must help the receiver, protect and turn over property, provide records and access information, and answer questions under oath when subpoenaed. Unless the court orders otherwise, property and creditor inventories are due within 14 days after appointment. Property lists include locations, liens, and estimated values; creditor lists include claim amounts, security, and disputes. After demand, holders generally must surrender property and pay due receivership debts to the receiver, with valid offsets preserved. Anyone with notice cannot satisfy those debts by paying the owner; creditors needing possession to preserve liens can retain property until court-ordered protection. Knowing owner violations can bring damages, fees, costs, or contempt; turnover contempt does not apply when the receiver's right is genuinely disputed.
Receivers can run and sell property
Receivers can operate businesses, collect money, protect property, pursue claims, and incur ordinary-course debt. Major actions require court approval, including improvements, nonordinary borrowing, transfers, settlements, distributions, and abandoning burdensome or worthless property. New nonordinary secured debt ranks behind existing liens unless other Illinois law allows otherwise. Court-approved sales need not use public auctions and generally remove the requesting party's lien, lower-ranking liens, and redemption rights unless sale terms differ. Senior liens and their secured obligations remain unaffected without senior lenders' consent; removed liens attach to proceeds at the same priority. A lienholder can bid using its allowed secured claim but must cover transfer costs and any extinguished senior obligations. A good-faith buyer's transfer survives reversal of approval unless the court stayed approval before the transfer.
Receivership professional fees face court review
Receivers need court approval to hire lawyers, accountants, appraisers, brokers, and other professionals on reasonable terms. They must disclose each professional's qualifications, work, possible conflicts, and proposed pay. Reasonable interim payments can occur before approval, subject to court procedures and later approval of unapproved amounts. Hourly fee requests must itemize time, work, rates, and expenses. These payments count as receivership administrative expenses, reducing property available for other claims.
Sponsors & Cosponsors
Sponsors
There is no primary sponsor on record.
Cosponsors
Camille Y. Lilly
Democratic • House
Daniel Didech
Democratic • House
Harry Benton
Democratic • House
Jawaharial Williams
Democratic • House
Rick Ryan
Democratic • House
Robert F. Martwick
Democratic • Senate
Roll Call Votes
Senate vote • 5/22/2025
Third Reading - Passed;
Yes: 58 • No: 0
Senate vote • 5/1/2025
Do Pass Judiciary;
Yes: 7 • No: 0
House vote • 4/8/2025
Third Reading - Short Debate - Passed
Yes: 116 • No: 0
House vote • 3/5/2025
House Floor Amendment No. 2 Recommends Be Adopted Judiciary - Civil Committee;
Yes: 17 • No: 0
House vote • 2/26/2025
House Floor Amendment No. 1 Recommends Be Adopted Judiciary - Civil Committee;
Yes: 18 • No: 0
House vote • 2/19/2025
Do Pass / Short Debate Judiciary - Civil Committee;
Yes: 18 • No: 1
Actions Timeline
Public Act . . . . . . . . . 104-0034
8/1/2025HouseEffective Date January 1, 2026
8/1/2025HouseGovernor Approved
8/1/2025HouseSent to the Governor
6/20/2025HousePassed Both Houses
5/22/2025HouseThird Reading - Passed; 058-000-000
5/22/2025SenatePlaced on Calendar Order of 3rd Reading **
5/20/2025SenatePlaced on Calendar Order of 3rd Reading May 13, 2025
5/8/2025SenateSecond Reading
5/8/2025SenatePlaced on Calendar Order of 2nd Reading May 6, 2025
5/1/2025SenateDo Pass Judiciary; 007-000-000
5/1/2025SenateAssigned to Judiciary
4/23/2025SenateReferred to Assignments
4/10/2025SenateFirst Reading
4/10/2025SenateChief Senate Sponsor Sen. Robert F. Martwick
4/10/2025SenatePlaced on Calendar Order of First Reading April 10, 2025
4/9/2025SenateArrive in Senate
4/9/2025SenateAdded Co-Sponsor Rep. Camille Y. Lilly
4/8/2025HouseAdded Chief Co-Sponsor Rep. Harry Benton
4/8/2025HouseAdded Chief Co-Sponsor Rep. Rick Ryan
4/8/2025HouseThird Reading - Short Debate - Passed 116-000-000
4/8/2025HouseAdded Chief Co-Sponsor Rep. Daniel Didech
4/4/2025HouseChief Sponsor Changed to Rep. Jawaharial Williams
4/4/2025HousePlaced on Calendar Order of 3rd Reading - Short Debate
3/18/2025HouseHouse Floor Amendment No. 2 Adopted
3/18/2025House
Bill Text
Engrossed
Enrolled
House Amendment 1
House Amendment 2
Introduced
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