Section 630.778

Title XL ADDITIONAL EXECUTIVE DEPARTMENTS

Chapter 630

Effective - 28 Aug 1980   

  630.778.  Receiver may disregard certain contracts — factors to be considered — court may order temporary noncompliance. — 1.  A receiver may not be required to honor any lease, mortgage, secured transaction or other wholly or partially executory contract entered into on behalf of the facility if the agreement is unconscionable.  Factors which shall be considered in determining the unconscionability include, but are not limited to, the following:

  (1)  The person seeking payment under the agreement was an affiliate of the individual contracting on behalf of the facility at the time the agreement was made;

  (2)  The rental, price, or rate of interest required to be paid under the agreement was substantially in excess of a reasonable rental, price or rate of interest at the time the agreement was entered into.

  2.  If the receiver is in possession of real estate or goods subject to a lease, mortgage or security interest which the receiver is permitted to avoid under subsection 1 of this section, and if the real estate or goods are necessary for the continued operation of the facility, the receiver may apply to the court to set a reasonable rental, price or rate of interest to be paid by the receiver during the duration of the receivership.  The court shall hold a hearing on the application within fifteen days.  The receiver shall send notice of the application to any known owners of the property involved at least ten working days prior to the hearing.  Payment by the receiver of the amount determined by the court to be reasonable is a defense to any action against the receiver for payment or for possession of person who received such notice, but the payment does not relieve the licensee or head of the facility of any liability for the difference between the amount paid by the receiver and the amount due under the original lease or mortgage involved.

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(L. 1980 H.B. 1724)