On January 1, 2026, Illinois will implement the Illinois Receivership Act, a new law that modernizes how commercial receiverships are appointed and administered. The Act creates a streamlined, uniform process for protecting, managing, and selling distressed assets—offering creditors faster, clearer remedies through receivership services in Illinois.
What the Act Does
The Act provides a comprehensive legal framework for appointing receivers before or after judgment in cases involving:
- Lien enforcement
- Business dissolution or deadlock
- Fraud, mismanagement, or insolvency
- Waste, loss, or dissipation of property
The law applies to all types of assets, including commercial real estate, residential real estate with more than six units, business assets, and personal property.
Key Changes Under the Act
- Streamlined Asset Sales
Receivers can sell business assets without using the UCC or an Assignment for the Benefit of Creditors, enabling faster liquidation and improved recovery.
- Real Estate Sales Without Foreclosure Requirements
Receivers may sell commercial property and residential buildings with more than six units without following the Illinois Mortgage Foreclosure Law, significantly accelerating turnaround times.
- Stronger Owner Obligations
Property owners must turn over assets, provide financial records, cooperate fully, and submit to sworn examinations—or face potential contempt.
- Expanded Receiver Powers
- Under the Act, receivers may:
- Secure, manage, and operate businesses
- Incur ordinary-course debt
- File or defend lawsuits
- Issue subpoenas
- Sell, lease, or transfer assets (with court approval outside the ordinary course)
- Assume or reject contracts
- Distribute proceeds to creditors
Why This Matters
For lenders, creditors, and commercial litigators, the Act provides faster remedies, clearer authority, and a more efficient path to recovery, offering powerful new tools for stabilizing distressed assets.
