This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Picture a distressed acquisition where the target is a Florida hotel — or a marina, a shopping center, an RV park — and the lender has already gotten a receiver appointed in the foreclosure action. A strategic buyer circles. The receiver’s broker whispers the phrase every distressed buyer wants to hear: the court can sell it to you free and clear of liens. The buyer’s deal team, fluent in bankruptcy’s section 363, nods along and assumes it knows the playbook. Florida’s receivership statute does borrow 363’s most famous feature — but it is a different machine, with a narrower intake, an owner-consent gate that 363 does not have, and finality rules a buyer must actually read.
Chapter 714 is a real-estate statute that happens to catch operating businesses
Florida adopted the Uniform Commercial Real Estate Receivership Act as Chapter 714, effective July 1, 2020, and its scope provision is the first thing an M&A lawyer should check. Section 714.04 applies the chapter to receiverships over an interest in real property and any incidental personal property related to or used in operating the real property. That formulation is why the statute matters for deal lawyers at all: for a hotel, the “incidental personal property” is the FF&E, the bookings, the operating accounts, the licenses that ride with the dirt — functionally, the business. Receivership sales under Chapter 714 are how revenue-producing real estate businesses change hands in distress without either a bankruptcy filing or a completed foreclosure. But the same scope language is the statute’s limit. A receivership over a software company, a staffing firm, or any operating business whose value does not sit on owned or leased real estate is not what this chapter is built for — courts appoint receivers over such businesses under other Florida law and their general equity powers, where Chapter 714’s tidy sale mechanics do not automatically apply. The chapter also excludes, among other things, one- and two-unit dwellings involving an individual’s homestead, a reminder that Florida’s homestead protections yield to almost nothing.
The free-and-clear power is real, but the gate in front of it is easy to miss
Section 714.16 houses the sale power, and subsection (4) delivers the headline: the court may order that a transfer of receivership property is free and clear of liens, with extinguished liens attaching to the sale proceeds in the same validity, perfection, and priority they had against the property. That is genuine 363-style relief — the buyer takes clean title, and the lien-priority fight moves to the pot of money. Subsection (5) adds the familiar credit-bid mechanic: a lienholder may purchase and offset its secured claim against the price, provided it covers transfer expenses and any senior liens its bid extinguishes in full.
The part buyers coming from bankruptcy tend to miss sits in subsection (2). Before judgment in the underlying action — which is when most receivership sales are proposed, since the whole point is to avoid riding the foreclosure to its end — a receiver may transfer receivership property outside the ordinary course only through one of two doors. Either the owner expressly consents in writing after the action commenced, or the owner fails to object after good-faith advance written notice and the receiver demonstrates that the sale is necessary to prevent waste, loss, substantial diminution in value, dissipation, or impairment of the property. There is no cramming a pre-judgment sale down over the owner’s live objection the way a bankruptcy trustee can under 363(f). A motivated, litigious owner can therefore stall the quick sale and force the case toward judgment — after which subsection (3) lets the court authorize transfers to carry the judgment into effect without the owner’s blessing. For a buyer, that means the first diligence question in any Florida receivership deal is posture: is the owner cooperating, defaulted, or fighting? The answer determines whether the sale happens in months or after a foreclosure judgment.
Notice mechanics carry real weight here too. The free-and-clear order binds lienholders because they were served — section 714.16 requires notice to all parties with an interest in the property, with formal service on nonparty lienholders under Florida’s service-of-process rules. A lien search error in bankruptcy is a problem; here, where the order’s power over a lienholder rests on service, a missed junior lienholder can mean a lien that survives the sale. Buyers should independently verify the lien search and the service list rather than adopting the receiver’s.
What the buyer gets — and the protections it should not assume
Chapter 714 gives a good-faith purchaser meaningful finality: under section 714.16(6), reversal or modification of a sale order on appeal does not affect the validity of the transfer to a good-faith buyer or revive extinguished liens, unless the order was stayed before the transfer closed. That is the receivership cousin of bankruptcy’s mootness protection, and it makes closing promptly after the order — before any stay issues — a genuine strategy. Section 714.17 handles the operational plumbing: with court approval the receiver may adopt or reject executory contracts, ipso facto clauses cannot block adoption, and the receiver may assign a contract if the owner could have assigned it under nonreceivership law. Note that last clause — unlike bankruptcy’s section 365, which overrides most anti-assignment provisions, Chapter 714 takes contract-law assignability as it finds it. A management agreement or franchise license with a real anti-assignment clause does not become assignable because a receiver holds it.
The larger point is what a receivership sale does not do. There is no discharge, no global claims bar with teeth like a confirmed plan, and nothing in Chapter 714 that purports to cut off successor-liability theories against the buyer as the new operator. Florida’s mere-continuation and de facto merger doctrines — covered in this earlier post on successor liability in Florida asset sales — remain live analysis, as do statutory successor regimes for taxes and employment obligations. The claims process in section 714.20 organizes distributions from the receivership; it does not immunize the purchaser. A buyer pricing a receivership deal should underwrite it the way it would underwrite any Florida distressed asset purchase, with the free-and-clear order treated as lien relief rather than a liability shield.
Choosing among the three distressed doors
Florida distressed M&A now runs through three main doors, and the right one is a fact question. Bankruptcy’s section 363 sale has the broadest free-and-clear power, the strongest finality case law, and nationwide reach — at the price of a federal filing, committees, and professional cost that mid-market deals often cannot carry. An assignment for the benefit of creditors under Chapter 727 is the debtor-initiated, whole-business tool, well suited to operating companies without a real-estate core. Chapter 714 is the lender-side tool for revenue-producing real estate: faster and cheaper than bankruptcy, more powerful than a bare foreclosure because the business keeps operating and transfers as a going concern, but bounded by its real-property scope and its pre-judgment owner-consent gate. Buyers do not usually pick the forum — they inherit it — but understanding why the seller’s side chose the door explains most of the leverage in the room.
The takeaway
Chapter 714 gave Florida a modern, uniform receivership sale mechanism, and section 714.16’s free-and-clear power is the genuine article: clean title, liens to proceeds, credit bids, and stay-or-it-stands finality for good-faith purchasers. But it is a commercial real estate statute, not a general business-sale statute; its pre-judgment sales run through owner consent or non-objection plus a necessity showing; its contract-assignment power respects anti-assignment clauses; and nothing in it discharges successor liability. The buyers who do well in these deals read the appointment order, verify the service list, close before a stay can issue, and price the liabilities the order cannot erase. A disciplined M&A process treats the receivership court as the deal’s most important counterparty.
If you are bidding on assets in a Florida receivership or weighing the distressed-sale alternatives on either side, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
