Analysis of Ohio's Amended Receivership Law | Page 10

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listed expenses (though, presumably, this is not an exclusive list) are
fees of the Receiver, fees of professionals assisting the Receiver, and
expenses incurred in connection with the Receiver’s sale or lease of
property, or the Receiver’s contracted-for construction work under
Section 2735.04(B)(4).
The court may not require that any person other than parties that
have requested or expressly consented to the Receiver incurring
expenses under Section 2735.04(B)(4) make an “additional deposit”
to cover such expenses. How might this provision operate? Imagine
a foreclosure action involving a partially constructed building that
is in need of protective expenditures, e.g., weather-proofing, or the
value of which may be enhanced by making certain improvements
– yet the borrower, and thus the Receiver, lacks adequate funds in
existing accounts to pay for these items. The statutory language
makes clear that a party, such as the mortgagee, cannot effectively
be forced to lend to the Receiver (i.e., make an “additional deposit”)
unless the mortgagee either requested that the Receiver arrange for
the work or expressly consented to it. However, a seemingly open
issue is whether such expenditures will, in fact, be determined to
be an administrative expense and paid as such. Therefore, when
in doubt, it may be advisable for the Receiver or appropriate party
to seek the court’s approval of the expenditure as an administrative
expense before the expenditure is made.
Note that Section 2735.04(C) refers to an “additional deposit” and
does not, by its terms, preclude the lender’s collateral from being
surcharged for Receivership expenses. Thus, a lender should
consider taking precautionary measures to ensure that expenses are
not involuntarily charged against the collateral, for example, upon
sale of the collateral, such as by providing in the appointment order

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