| "body"> | | | | matter, the auctioneer is paid by the senior lien holder. |
| In Indiana, mortgage foreclosures must be judicial | | | | This is perhaps the major, if not only, downside to a |
| (through the court system). As a general proposition, | | | | privately-conducted sale - the fees of the auctioneer. |
| real estate collateral must be sold, pursuant to a | | | | So, be sure to explore the cost issue before even |
| judge's decree, by the county civil sheriff's office. | | | | requesting such relief from the court. Although civil |
| An alternative. Although not commonly utilized, Indiana | | | | sheriff's fees may vary from county to county, |
| has a statute giving parties the option, in mortgage | | | | generally speaking an auction conducted by a sheriff is |
| foreclosure actions, to conduct sheriff's sales through a | | | | going to be cheaper than one conducted by a private |
| private auctioneer. In other words, an outside | | | | auctioneer. Needless to say, a lender's valuation of the |
| auctioneer can hold the sheriff's sale on the sheriff's | | | | collateral will play a significant factor in the decision to |
| behalf. The statute is Indiana Code § | | | | pursue the course of action afforded by I.C. § |
| 32-30-10-9(b), which states that either the debtor or a | | | | 32-30-10-9. |
| creditor may petition the court to require the property | | | | A potentially good thing. I.C. § 32-30-10-9(b) is a |
| to be sold "by the sheriff through the services of an | | | | nice option for lenders foreclosing on commercial real |
| auctioneer" if: (1) the court determines a sale is | | | | estate collateral in Indiana. Some Indiana counties may |
| economically feasible OR (2) all creditors agree to both | | | | not hold regular sheriff's sales, or their civil sheriff's |
| the sale method and the auctioneer's compensation. | | | | offices may not be well-equipped to, or particularly |
| Even if you can't get all the creditors to consent to the | | | | interested in, conducting sophisticated sales of |
| method, I think most courts would permit the use of a | | | | commercial real estate. Or, a private firm may be in a |
| private auctioneer absent unique, compelling reasons to | | | | better position to market the collateral before the |
| the contrary. | | | | auction. Indeed there are a multitude of factors that |
| Costs. The auctioneer's fee must be reasonable and | | | | may go into a lender's decision to utilize a private |
| stated in the court's order. In the unlikely event such a | | | | auctioneer versus a civil sheriff. The option should be |
| sale occurs without the consent of all creditors, and if | | | | analyzed on a case-by-case basis. As a lender |
| the sale price is less than the judgment, then the | | | | seeking to squeeze as much cash as possible out of |
| auctioneer only is entitled to $100 in fees plus any | | | | an Indiana sheriff's sale of commercial property, you |
| out-of-pocket advertising expenses. Amounts due the | | | | should be mindful of your right to choose a private |
| auctioneer (fees and expenses) must be paid as a | | | | auctioneer and conduct a cost/benefit analysis |
| cost of the sale from the proceeds before the | | | | accordingly. |
| payment of any other payments. So, as a practical | | | | |