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SB 1791

Remedies and Special Proceedings - As introduced, prevents a receivership proceeding from interfering with the rights of a superior interest holder in property subject to the receivership absent the express consent of the superior interest holder. - Amends TCA Title 29.

114th Regular Session (2025-2026)

SB 1791 prohibits receivership proceedings from interfering with superior property interest holders' rights without their explicit written consent.

Introduced, Passed on First Consideration
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WeVote Research Nonpartisan
Bill Summary · SB 1791

Legislative bill overview

SB 1791 modifies Tennessee's receivership laws to protect the rights of parties holding superior interests in property (such as first mortgage holders or senior lienholders). The bill prevents a receivership proceeding from interfering with or diminishing these superior interests unless the superior interest holder explicitly consents. This creates a protective barrier for secured creditors in receivership situations.

Why is this important

Receiverships are court-supervised proceedings where a neutral third party (receiver) takes control of assets to manage them for creditors or other stakeholders. Without this protection, a receiver's actions could theoretically compromise a senior creditor's security or repayment priority. The bill clarifies that superior interest holders maintain their legal standing and cannot be subordinated by receivership proceedings without their agreement, which affects lending practices and property rights in distressed situations.

Potential points of contention

  • Impact on receivership flexibility: Critics may argue that requiring superior interest holder consent limits a receiver's ability to operate property efficiently or restructure assets in ways that could maximize recovery for all creditors
  • Definition clarity: The bill's effectiveness depends on how "superior interest holder" and "express consent" are legally interpreted—ambiguity could spawn litigation over what qualifies
  • Practical enforcement: Superior interest holders may lack notice of receivership proceedings, creating questions about when and how consent must be obtained and whether retroactive protections apply

Compiled from official sources — confirm details with the bill’s official record.

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