§69.2. Receiverships; procedure; powers, duties, and qualifications; disposition of cemetery

A. The Louisiana Cemetery Board shall notify the attorney general of the potential need for the establishment of a receivership if the board finds that a cemetery meets one or more of the following conditions:

(1) Is insolvent. For purposes of this Section, the term "insolvent" shall mean any of the following:

(i) Having generally ceased to pay debts in the ordinary course of business with the exception of debts in which there is a bona fide dispute.

(ii) Being unable to pay debts as they become due.

(iii) Being insolvent within the meaning of federal bankruptcy law.

(2) Has utilized trust funds for personal or business purposes in a manner inconsistent with Chapter 7 or 8 of this Title and the rules and regulations of the board.

(3) Has consistently failed to deliver paid-in-full merchandise to consumers.

(4) Has had its certificate of authority revoked by the board.

(5) Has a certificate of authority from the board that is in suspension, conditional suspension, or has not been renewed or reinstated by the board once it has lapsed.

(6) Has never obtained a certificate of authority from the board but nonetheless is operating a cemetery.

(7) Has been found, pursuant to the on-site examinations and board hearings authorized by this Title, to have repeatedly violated provisions of this Title or the rules and regulations of the board.

(8) Has been found, pursuant to the on-site examinations and board hearings authorized by this Title, to be operating in a manner that is harmful to the health, safety, or welfare of the public.

(9) Has failed to properly maintain the maps and interment records as required by this Title and the rules and regulations of the board.

(10) Has otherwise violated the provisions of this Title or the rules and regulations of the board.

B.(1) When it appears to the attorney general that a cemetery has engaged in or is engaging in a practice declared to be unlawful by this Title or that any of the conditions set forth in Subsection A of this Section are met, the attorney general may apply only after a reasonable attempt is made by the board to force compliance to the district court for the jurisdiction in which the cemetery is located for either of the following:

(a) An order appointing a receiver of the assets of the cemetery.

(b) An ex parte temporary restraining order to protect the assets and records of the cemetery.

(2) The court, upon receipt of a petition for a temporary restraining order which is verified by the attorney general, shall, after being satisfied that the interests of the public require the issuance of a temporary restraining order shall order that the cemetery assets, including but not limited to bank accounts, be frozen and preserved or may issue an order requiring that certain documents held by the cemetery owner be preserved, or both.

(3) The court, upon receipt of a petition for the appointment of a receiver, shall conduct a hearing on whether or not to appoint a receiver within twenty-four hours after service of the petition on the cemetery owner or licensee. If the court finds that it is in the best interest of the public that a receiver be appointed, the court shall direct that a copy of the order appointing the receiver be served on the cemetery authority engaged in or engaging in a practice declared to be unlawful under this Title by delivering the order to the last address of the cemetery that is on file with the board and the secretary of state.

(4) Upon the institution of a receivership by the court, the court shall have the authority to impound the property and business of the cemetery, including but not limited to maps, books, papers, documents, computers, and records appertaining thereto or so much thereof as the court may deem reasonably necessary to prevent further violation of this Title and so much thereof as the court may deem necessary to return the cemetery to compliance with this Title.

C.(1) A receiver appointed by the court shall take possession of the assets of the cemetery and shall be vested with the authority to administer, manage, and oversee all affairs of the cemetery.

(2) The appointed receiver shall not be required to post a bond for any activities undertaken pursuant to this Title or the rules and regulations of the board.

(3) The court may allow the receiver to file for protection under the bankruptcy code.

(4) The activities of the receiver shall not be limited or barred by the imposition of any penalties or conditions previously imposed upon the cemetery by the board.

(5) The receiver may pay the salaries and compensation that the receiver deems necessary for the administration and management of the cemetery.

(6) The receiver shall have the authority to hire and fire employees of the cemetery as he deems necessary in order to carry out all duties necessary for the administration and management of the cemetery.

(7) The receiver may be reimbursed for his expenditures under this Section from the assets of the cemetery as funds become available.

(8) The receiver shall also have all of the powers granted to receivers under R.S. 12:151 et seq.

(9) The receiver shall hold or have the qualifications to hold, pursuant to the qualifications identified in this Title and in the rules and regulations of the board, a certificate of authority to operate a cemetery from the board. The appointments shall be limited to one year with reappointment permissible. Any person appointed under this Section shall be required to make an accounting to and file a report with the court, the attorney general, and the board at least once each ninety days.

(10) Compensation for such receivers shall be within the discretion of the court but shall not include actual expenditures by the receiver. The receiver shall be reimbursed for all actual receipts for expenditures as funds become available and certainly no later than at the termination of the receivership.

(11) The board shall not be liable for any expenses or fees of the receiver.

D.(1) Upon restoration of the cemetery so that it complies with the provisions of this Title and the rules and regulations of the board, the court shall terminate the receivership.

(2) Upon good cause shown, the court may terminate the receivership prior to compliance with the provisions of this Title and the rules and regulations of the board to allow for the sale of the cemetery to a qualified purchaser who has agreed to complete the requirements for compliance with this Title and the rules and regulations of the board.

(3) If the owner of the cemetery cannot obtain a certificate of authority to operate the cemetery from the board, the cemetery property and assets shall be sold at a judicial sale pursuant to R.S. 9:3001 and R.S. 13:4341 et seq.

(4) The purchaser of the cemetery shall hold or be able to obtain, pursuant to the qualifications identified in this Title and in the rules and regulations of the board, a certificate of authority to operate a cemetery from the board.

(5) This Section shall not prohibit the court from allowing the sale of the cemetery to a municipal corporation.

(6) The receiver and his employees shall be prohibited from bidding on or purchasing the cemetery at the judicial sale. This provision shall not apply if the receiver is a governmental entity or a not-for-profit organization.

(7) In the order of sale of the cemetery, the court shall make a provision for notice to creditors and the filing of claims against the receivership. Any remaining funds held by the cemetery or funds realized through the sale of the cemetery under this Section shall be used to satisfy, in the following order:

(a) The reimbursement and compensation of the receiver.

(b) The cemetery's consumers or beneficiaries of the consumers.

(c) The cemetery's creditors.

(8) Upon payment of the receiver, consumers or beneficiaries of the consumers, and the creditors, the remaining funds acquired through the judicial sale of the cemetery shall be disbursed in the following order:

(a) Forty percent of the amount remaining following the payments required by Paragraph (7) of this Subsection shall be placed in the registry of the court for a period of two years and shall be disbursed to cover any unfunded liability, including but not limited to pre-need sales, that is not discovered during the receiver's review of the cemetery's records.

(b) The remaining sixty percent shall be disbursed to the owner against whom the receivership was instituted.

(c) Following the two year period required by Subparagraph (a) of this Paragraph, funds remaining in the registry of the court may be released to the owner against whom the receivership was instituted unless there is a reasonable showing that outstanding unfunded liabilities continue to exist. Upon such a showing, the court may order that the remaining funds stay in the court registry until such a time as the unfunded liabilities are satisfied.

(9) The provisions of this Section shall not apply to a cemetery which is located in an area which is under a gubernatorially declared disaster pursuant to R.S. 29:724, so long as the executive order is in effect.

Acts 2008, No. 541, §1, eff. June 30, 2008.