Wilmington Trust, National Association v. Bricks & Timber Residential LLC

Background

The court considered the receiver’s consent motion to market and sell receivership assets through a series of online auctions under 28 U.S.C. §§ 2001 and 2002. The receivership estate consisted of 73 single-family rental properties in Alabama, Georgia, Indiana, and Mississippi. The receiver sought authority to sell the properties free and clear of liens, encumbrances, and claims.

The court had appointed the receiver on October 7, 2024. That appointment order allowed the receiver to enter into contracts to sell the properties, but required the receiver to petition the court and obtain a further order confirming each proposed sale before completing it. The receiver posted a bond on October 15, 2024, and assumed his duties.

After evaluating the properties and considering different ways to dispose of the collateral, the receiver recommended online auctions. He told the court that the proposed procedures were commercially reasonable, would produce a fair and equitable recovery for the receivership estate, and would make the later approval of individual sales more efficient. The receiver proposed using Auction.com.

Legal Framework and Analysis

Section 2001(a) authorizes federal courts to direct the terms and conditions for public sales of real property, including property held by a receiver. Section 2002 requires advance publication of notice of a public sale. The court noted that other federal district courts had approved online auctions and had found that online marketing and notice procedures could comply substantially with those statutes.

The court found that the receiver’s proposed procedures were commercially reasonable, would result in a fair and equitable recovery for the receivership estate, and would promote judicial efficiency. It concluded that the procedures substantially complied with the statutory requirements for advertising and selling real property under §§ 2001 and 2002.

Order

The court granted the motion and ordered the following:

- The receiver was authorized to engage Auction.com to conduct the auctions. - Subject to the plaintiff’s prior written approval, the receiver could set the sale terms and specify a “Contract Reserve Price” for each property, whether properties were sold individually or in bulk lots. The reserve price meant the gross contract price approved before the sale, not the net cash received after expenses. - The properties could be advertised on a rolling basis. The auctions were to begin in August 2025 and be completed by December 31, 2025. - Auction.com was to advertise each auction on its website for four weeks immediately before the auction and could use targeted email marketing and outreach calls to prospective buyers and prior single-family buyers and platform users. - If a valid bid met or exceeded the reserve price, or otherwise had price and terms acceptable to the receiver subject to the plaintiff’s prior written approval, the highest bidder would enter into a Sale Procedures Agreement. - The successful bidder would be required to purchase the property, but the sale remained subject to court approval. Within five business days after each auction, the receiver was to file a short motion seeking approval of the proposed sale and authorization to transfer the property to the winning bidder by receiver’s deed as described in the agreement. - An auction without an approved buyer purchasing at or above the reserve price would be suspended, re-advertised, and held again later. - The receiver was required to continue filing reports under the October 7, 2024 appointment order. The receiver and parties were also required to report the sales’ status by November 14, 2025, including whether more time was needed beyond December 31, 2025. - Certain deadlines under the Federal Rules of Civil Procedure and the court’s local rules—including deadlines concerning a preliminary planning report, initial disclosures, discovery, amended pleadings, and dispositive motions—were stayed until further order.

This was an ancillary order governing the receivership sales and related case procedures; it did not decide the underlying claims between the parties. Judge Seibel granted the receiver’s consent motion.