INSOLVENCY; RECEIVERS

K.S.A. ch. 17, art. 69

in effect

K.S.A. 17-6901 Receivers for insolvent corporations; appointment; powers.

17-6901. Receivers for insolvent corporations; appointment; powers. Whenever a corporation shall be insolvent, the district court, on the application of any creditor or stockholder thereof, may appoint, at any time, one or more persons to be receivers of and for the corporation, to take charge of its assets, estate, effects, business and affairs, and to collect the outstanding debts, claims and property due and belonging to the corporation, with power to prosecute and defend, in the name of the corporation or otherwise, all claims or suits, to appoint an agent or agents under them and to do all other acts which might be done by the corporation and which may be necessary or proper. The powers of the receivers shall be such and shall continue so long as the court shall deem necessary. L. 1972, ch. 52, § 104; July 1. Source or Prior Law: 17-3607; 8 Del. C. § 291. Cross References to Related Sections: Appointment of custodian, see 17-6516. Receivers for dissolved corporations, see 17-6808 through 17-6810. Filing order of appointment as receiver with register of deeds, see 17-6902(b). Compensation and expenses of receiver, see 17-6908. Appointment of temporary receiver to administer compromise or arrangement between corporation and creditors or stockholders, see 17-6912. Appointment of provisional director for close corporation, see 17-7213. Appointment of receivers under code of civil procedure, see chapter 60, article 13. CASE ANNOTATIONS 1. Private lease agreements between licensed warehousemen and depositors held contrary to public policy. State ex rel. Crawford v. Centerville Grain Co., 5 Kan. App. 2d 451, 452, 618 P.2d 1206 (1980). 2. Creditor of insolvent corporation cannot maintain personal action on own behalf against directors or officers who breach duty by negligent mismanagement. Speer v. Dighton Grain, Inc., 229 Kan. 272, 280, 284, 288, 624 P.2d 952 (1981). 3. Distinctions between custodianship and receivership noted. Valley View State Bank v. Owen, 241 Kan. 343, 347, 737 P.2d 35 (1987). 4. State court-appointed receiver for putative corporate debtor was proper party to answer involuntary petition. In re Starlite Houseboats, Inc., 426 B.R. 375 (2010).

K.S.A. 17-6902 Title to corporation's property; filing order of appointment; exceptions to section's application.

17-6902. Title to corporation's property; filing order of appointment; exceptions to section's application. (a) Trustees or receivers appointed by the district court of and for any corporation, and their respective survivors and successors, upon their appointment and qualification or upon the death, resignation or discharge of any co-trustee or co-receiver, shall be vested by operation of law and without any act or deed with the title of the corporation to all of its property, real, personal or mixed of whatsoever nature, kind, class or description, and wheresoever situate, except real estate situated outside this state. (b) Within 20 days after the date of their qualification, trustees or receivers appointed by the court shall file in the office of the register of deeds of each county in this state in which any real estate belonging to the corporation may be situated, a certified copy of the order of their appointment and evidence of their qualification. (c) This section shall not apply to receivers appointed pendente lite. L. 1972, ch. 52, § 105; L. 2004, ch. 143, § 63; L. 2016, ch. 110, § 90; July 1. Source or Prior Law: 8 Del. C. § 292. Cross References to Related Sections: Power of corporation to acquire property outside state, see 17-6102(4). Inventory of corporate assets, see 17-6904. Sale of property which will deteriorate in value pending litigation, see 17-6907. Law Review and Bar Journal References: "The Kansas Corporation Code of 1972," William E. Treadway, 40 J.B.A.K. 301, 347 (1971).

K.S.A. 17-6903 Notices to stockholders and creditors.

17-6903. Notices to stockholders and creditors. All notices required to be given to stockholders and creditors in any action in which a trustee or receiver for a corporation was appointed shall be given by the clerk of the district court or in the manner provided by any applicable section of the code of civil procedure, unless otherwise ordered by the district court. L. 1972, ch. 52, § 106; L. 2004, ch. 143, § 64; L. 2016, ch. 110, § 91; July 1. Source or Prior Law: 8 Del. C. § 293. Cross References to Related Sections: Notice of stockholders' meetings, see 17-6512. Waiver of notice, see 17-6519. Exception to notice requirements, see 17-6520. Notice to creditors of time for filing and making proof of claims, see 17-6905. Notice of appointment of receiver under civil code, see 60-1304.

K.S.A. 17-6904 Filing inventory of corporate assets and list of debts owing and receivable.

17-6904. Filing inventory of corporate assets and list of debts owing and receivable. As soon as convenient, trustees or receivers shall file in the office of the clerk of the district court of the county in which the proceeding is pending, a full and complete itemized inventory of all the assets of the corporation, which shall show their nature and probable value, and an account of all debts due from and to the corporation, as nearly as the same can be ascertained. They shall make a report to the court of their proceedings whenever and as often as the court shall direct. L. 1972, ch. 52, § 107; L. 2004, ch. 143, § 65; L. 2016, ch. 110, § 92; July 1. Source or Prior Law: 8 Del. C. § 294. Cross References to Related Sections: Power of corporation to acquire and dispose of property, see 17-6102(4). Sale, lease or exchange of corporate assets and property, see 17-6801. Mortgage or pledge of corporate assets and property, see 17-6802. Vesting of title to corporate property in trustee or receiver, see 17-6902(a). Sale of property which will deteriorate in value pending litigation, see 17-6907. Law Review and Bar Journal References: "The Kansas Corporation Code of 1972," William E. Treadway, 40 J.B.A.K. 301, 347 (1971).

K.S.A. 17-6905 Proof of claims by creditors; claims barred, when; notice.

17-6905. Proof of claims by creditors; claims barred, when; notice. All creditors shall make proof under oath of their respective claims against the corporation and shall cause such proof of claim to be filed in the office of the clerk of the district court of the county in which the proceeding is pending within the time fixed by and in accordance with the procedure established by the district court. All creditors and claimants failing to do so, within the time limited by this section, or the time prescribed by the order of the court, may be barred by the court from participating in the distribution of the assets of the corporation. The court also may prescribe what notice, by publication or otherwise, shall be given to the creditors of the time fixed for the filing and making proof of claims. L. 1972, ch. 52, § 108; L. 2004, ch. 143, § 66; L. 2016, ch. 110, § 93; July 1. Source or Prior Law: 17-4002; 8 Del. C. § 295. Cross References to Related Sections: Appointment of receiver for dissolved corporation, see 17-6808. Appointment of receiver for insolvent corporation, see 17-6901. Notice, see 17-6903. Allowance or disallowance of claims, see 17-6906. Lien of employee for labor or services, see 17-6910. Compromise or arrangement between corporation and creditors or stockholders, see 17-6912.

K.S.A. 17-6906 Procedure for adjudicating creditors' claims; appeal.

17-6906. Procedure for adjudicating creditors' claims; appeal. (a) The clerk of the district court, immediately upon the expiration of the time fixed for the filing of claims, in compliance with the provisions of K.S.A. 17-6905 , and amendments thereto, shall notify the trustee or receiver of the filing of the claims, and the trustee or receiver, within 30 days after receiving the notice, shall inspect the claims, and if the trustee or receiver or any creditor shall not be satisfied with the validity or correctness of the same, or any of them, the trustee or receiver shall forthwith notify the creditors whose claims are disputed of such decision. The trustee or receiver shall require all creditors whose claims are disputed to submit themselves to such examination in relation to their claims as the trustee or receiver shall direct, and the creditors shall produce such books and papers relating to their claims as shall be required. The trustee or receiver shall have power to examine, under oath or affirmation, all witnesses produced before the trustee or receiver touching the claims, and shall pass upon and allow or disallow the claims, or any part thereof, and notify the claimants of such determination. (b) Every creditor or claimant who shall have received notice from the receiver or trustee that such creditor's or claimant's claim has been disallowed in whole or in part may appeal to the district court within 30 days thereafter. The court, after hearing, shall determine the rights of the parties. L. 1972, ch. 52, § 109; L. 2004, ch. 143, § 67; L. 2016, ch. 110, § 94; July 1. Source or Prior Law: 17-4002; 8 Del. C. § 296. Cross References to Related Sections: Notice, see 17-6903. Compromise or arrangement between corporation and creditors or stockholders, see 17-6912. Appeal to supreme court, see chapter 60, article 21.

K.S.A. 17-6907 Sale of perishable or deteriorating property during pendency of litigation.

17-6907. Sale of perishable or deteriorating property during pendency of litigation. Whenever the property of a corporation is at the time of the appointment of a trustee or receiver encumbered with liens of any character, and the validity, extent or legality of any such lien is disputed or brought in question, and the property of the corporation is of a character which will deteriorate in value pending the litigation respecting the lien, the district court may order the receiver or trustee to sell the property of the corporation, clear of all encumbrances, at public or private sale, for the best price that can be obtained therefor. The net proceeds arising from the sale thereof, after deducting the costs of the sale, shall be paid into the court, there to remain subject to the order of the court, and to be disposed of as the court shall direct. L. 1972, ch. 52, § 110; L. 2004, ch. 143, § 68; L. 2016, ch. 110, § 95; July 1. Source or Prior Law: 8 Del. C. § 297. Cross References to Related Sections: Sale, lease or exchange of corporate assets and property, see 17-6801. Mortgage or pledge of corporate assets and property, see 17-6802. Vesting of title to corporate property in trustee or receiver, see 17-6902(a). CASE ANNOTATIONS 1. Default judgment creates valid statutory lien; in absence of any evidence disputing lien, receiver may not sell real estate free of encumbrances. J.E. Akers Co. v. Advertising Unlimited, Inc., 274 Kan. 359, 49 P.3d 506 (2002).

K.S.A. 17-6908 Compensation, costs and expenses.

17-6908. Compensation, costs and expenses. The district court, before making distribution of the assets of a corporation among the creditors or stockholders thereof, shall allow and pay out of the assets: (a) A reasonable compensation to the trustee or receiver for the trustee's or receiver's services; (b) the cost and expenses incurred in and about the execution of such trustee's or receiver's trust, including reasonable attorney fees; and (c) the costs of the proceedings in the court. L. 1972, ch. 52, § 111; L. 2004, ch. 143, § 69; L. 2016, ch. 110, § 96; July 1. Source or Prior Law: 17-4002; 8 Del. C. § 298. Cross References to Related Sections: Payment of debts and distribution of assets of dissolved corporation, see 17-6810. Items allowable as costs, see 60-2003. Law Review and Bar Journal References: "Recovery of Attorney Fees in Kansas," Mark A. Furney, 18 W.L.J. 535, 546, 557 (1979). CASE ANNOTATIONS 1. Cited in holding provisional director also acting in capacity as custodian to be paid by corporation or from its assets. Coles v. Taliaferro, 251 Kan. 648, 655, 840 P.2d 1102 (1992).

K.S.A. 17-6909 Substitution of receiver as plaintiff; abatement of actions.

17-6909. Substitution of receiver as plaintiff; abatement of actions. A trustee or receiver, upon application by the trustee or receiver in the court in which any suit is pending, shall be substituted as party plaintiff in the place of the corporation in any suit or proceeding which was so pending at the time of the trustee's or receiver's appointment. No action against a trustee or receiver of a corporation shall abate by reason of the trustee's or receiver's death, but, upon suggestion of the facts on the record, shall be continued against the trustee's or receiver's successor or against the corporation in case no new trustee or receiver is appointed. L. 1972, ch. 52, § 112; L. 2004, ch. 143, § 70; L. 2016, ch. 110, § 97; July 1. Source or Prior Law: 17-4010, 17-4011; 8 Del. C. § 299. Cross References to Related Sections: Effect of dissolution on pending actions, see 17-6811. Effect of code on pending actions, see 17-7403.

K.S.A. 17-6910 Employee's lien for wages when corporation insolvent.

17-6910. Employee's lien for wages when corporation insolvent. Whenever any corporation of this state, or any foreign corporation doing business in this state, shall become insolvent, the employees doing labor or service of whatever character in the regular employ of the corporation, shall have a lien upon the assets thereof for the amount of the wages due to them, not exceeding two months' wages, respectively, which shall be paid prior to any other debt or debts of the corporation. The word "employee" as used in this section shall not be construed to include any of the officers of the corporation. L. 1972, ch. 52, § 113; L. 2004, ch. 143, § 71; L. 2016, ch. 110, § 98; July 1. Source or Prior Law: 8 Del. C. § 300. Cross References to Related Sections: Officers of corporation, see 17-6302. Claims of creditors, see 17-6905, 17-6906. Law Review and Bar Journal References: "The Kansas Corporation Code of 1972," William E. Treadway, 40 J.B.A.K. 301, 347 (1971). CASE ANNOTATIONS 1. Although plain language of statute gives employees a lien on a corporation's assets for due wages, it does not provide that the lien is prioritized over existing liens on those assets. Bank Midwest v. R.F. Fisher Elec. Co., LLC, 514 F. Supp. 3d 1310, 1317 (D. Kan. 2021). 2. Majority shareholder in a company cannot be found liable for unjust enrichment when there is no evidence to show that the shareholder gained an individual benefit through corporate dealings. EST Inc. v. Royal-Grow Prods., LLC, 526 F. Supp. 3d 943 (D. Kan. 2021).

K.S.A. 17-6911 Discontinuance of liquidation of assets; dismissal of trustee or receiver.

17-6911. Discontinuance of liquidation of assets; dismissal of trustee or receiver. The liquidation of the assets and business of an insolvent corporation may be discontinued at any time during the liquidation proceedings when it is established that cause for liquidation no longer exists. In such event the district court in its discretion, and subject to such condition as it may deem appropriate, may dismiss the proceedings and direct the trustee or receiver to redeliver to the corporation all of its remaining property and assets. L. 1972, ch. 52, § 114; L. 2004, ch. 143, § 72; L. 2016, ch. 110, § 99; July 1. Source or Prior Law: 8 Del. C. § 301. Cross References to Related Sections: Vesting of title to corporate property in trustee or receiver, see 17-6902(a). Payment of allowances, expenses and costs, see 17-6908. Law Review and Bar Journal References: "The Kansas Corporation Code of 1972," William E. Treadway, 40 J.B.A.K. 301, 347 (1971).

K.S.A. 17-6912 Compromise or arrangement between corporation and stockholders or creditors.

17-6912. Compromise or arrangement between corporation and stockholders or creditors. (a) Whenever the provision permitted by subsection (b)(2) of K.S.A. 17-6002 is included in the original articles of incorporation of any corporation, all persons who become creditors or stockholders thereof shall be deemed to have become such creditors or stockholders subject in all respects to that provision and the same shall be absolutely binding upon them. Whenever that provision is inserted in the articles of incorporation of any such corporation by an amendment of its articles all persons who become creditors or stockholders of such corporation after such amendment shall be deemed to have become such creditors or stockholders subject in all respects to that provision, and the same shall be absolutely binding upon them. (b) The district court may administer and enforce any compromise or arrangement made pursuant to the provision contained in subsection (b)(2) of K.S.A. 17-6002 , and it may restrain pendente lite all actions and proceedings against any corporation with respect to which the court shall have begun the administration and enforcement of that provision. The court also may appoint a temporary receiver for such corporation, with such powers as it deems proper, and may make and enforce such rules as it deems necessary for the exercise of such jurisdiction. L. 1972, ch. 52, § 115; July 1. Source or Prior Law: 17-3002, 17-4001; 8 Del. C. § 302. Cross References to Related Sections: Appointment of receiver for insolvent corporation, see 17-6901. Distribution of assets of dissolved corporation, see 17-6810. Claims of creditors, see 17-6905, 17-6906. Substitution of receiver as plaintiff in pending actions, see 17-6909. Actions against corporations, see chapter 17, article 71.

K.S.A. 17-6913 Proceeding under the federal bankruptcy code of the United States; implementation.

17-6913. Proceeding under the federal bankruptcy code of the United States; implementation. (a) Any corporation of this state, an order for relief with respect to which has been entered pursuant to the federal bankruptcy reform act of 1978 (11 U.S.C. §§ 101 et seq.), may put into effect and carry out any decrees and orders of the court or judge in such bankruptcy proceeding, and may take any corporate action provided or directed by such decrees and orders, without further action by its directors or stockholders. Such power and authority may be exercised, and such corporate action may be taken, as may be directed by such decrees or orders, by the trustee or trustees of such corporation appointed or elected in the bankruptcy proceedings, or a majority thereof, or if none be appointed or elected and acting, by designated officers of the corporation, or by a representative appointed by the court or judge, with like effect as if exercised and taken by unanimous action of the directors and stockholders of the corporation. (b) In the manner provided in subsection (a), but without limiting the generality or effect of the foregoing, such corporation may: Alter, amend or repeal its bylaws; constitute or reconstitute and classify or reclassify its board of directors, and name, constitute or appoint directors and officers in place of or in addition to all or some of the directors or officers then in office; amend its articles of incorporation, and make any change in its capital or capital stock, or any other amendment, change or alteration, or provision, authorized by this code; be dissolved, transfer all or part of its assets, merge or consolidate as permitted by this code, except that no stockholder shall have any statutory right of appraisal of such stockholder's stock; change the location of its registered office, change its resident agent and remove or appoint any agent to receive service of process; authorize and fix the terms, manner and conditions of, the issuance of bonds, debentures or other obligations, whether or not convertible into stock of any class, or bearing warrants or other evidences of optional rights to purchase or subscribe for stock of any class; or lease its property and franchises to any corporation, if permitted by law. (c) A certificate of any amendment, change or alteration, or of dissolution, or any agreement of merger or consolidation, made by such corporation pursuant to the provisions of this section, shall be filed with the secretary of state in accordance with K.S.A. 17-7910 , and amendments thereto, and, subject to K.S.A. 17-7911 , and amendments thereto, shall thereupon become effective in accordance with its terms and the provisions of this subsection. Such certificate, agreement of merger or other instrument shall be made and executed, as may be directed by such decrees or orders, by the trustee or trustees appointed or elected in the bankruptcy proceedings, or a majority thereof, or, if none be appointed or elected and acting, by the officers of the corporation, or by a representative appointed by the court, and shall certify that provision for the making of such certificate, agreement or instrument is contained in a decree or order of a court having jurisdiction of a proceeding under the federal bankruptcy reform act of 1978 (11 U.S.C. §§ 101 et seq.). (d) The provisions of this section shall cease to apply to such corporation upon the entry of a final decree in the bankruptcy proceedings closing the case and discharging the trustee or trustees, if any, will not affect the validity of any act previously performed pursuant to subsections (a) through (c). (e) On filing any certificate, agreement, report or other paper made or executed pursuant to the provisions of this section, there shall be paid to the secretary of state for the use of the state the same fees as are payable by corporations not in bankruptcy upon the filing of like certificates, agreements, reports or other papers. L. 1972, ch. 52, § 116; L. 1999, ch. 39, § 16; L. 2000, ch. 39, § 39; L. 2016, ch. 110, § 100; July 1. Source or Prior Law: 8 Del. C. § 303. Cross References to Related Sections: Adoption of bylaws, see 17-6009. Board of directors, see 17-6301. Amendment of articles of incorporation, see 17-6602, 17-6605. Merger or consolidation, see chapter 17, article 67. Sale, lease or exchange of corporate assets and property, see 17-6801. Mortgage or pledge of corporate assets and property, see 17-6802. Dissolution, see 17-6804 through 17-6806. Law Review and Bar Journal References: "The Kansas Corporation Code of 1972," William E. Treadway, 40 J.B.A.K. 301, 347 (1971).

Source: Kansas Office of Revisor of Statutes (ksrevisor.gov)URL: https://www.ksrevisor.gov/statutes/ksa_ch17.htmlFetched: 10/20/2026