§ 238. Operation of Farm, Ranch, Factory, or Other Business
238. Operation of Farm, Ranch, Factory, or Other Business
(a) In this section, “business” includes a farm, ranch, or factory.
(b) A court, after notice to all interested persons and a hearing, may order the personal representative of an estate to operate a business that is part of the estate and may grant the personal representative the powers to operate the business that the court determines are appropriate, after considering the factors listed in Subsection (f) of this section, if:
(1) the disposition of the business has not been specifically directed by the decedent's will;
(2) it is not necessary to sell the business at once for the payment of debts or other lawful purposes; and
(3) the court determines that the operation of the business by the personal representative is in the best interest of the estate.
(c) A personal representative who is granted the power to operate a business in an order entered under this section has the powers granted under Section 234(b) of this code, regardless of whether the order specifies that the personal representative has those powers, unless the order specifically provides that the personal representative does not have one or more of the powers listed in that section.
(d) In addition to the powers granted to the personal representative under Section 234(b) of this code, subject to any specific limitation on those powers in accordance with Subsection (c) of this section, an order entered under this section may grant the personal representative one or more of the following powers:
(1) the power to hire, pay, and terminate the employment of employees of the business;
(2) the power to incur debt on behalf of the business, including debt secured by liens against assets of the business or estate, if permitted or directed in the order;
(3) the power to purchase and sell property in the ordinary course of the operation of the business, including the power to purchase and sell real property if the court finds that the principal purpose of the business is the purchasing and selling of real property and the order states that finding;
(4) the power to enter into a lease or contract, the term of which may extend beyond the settlement of the estate, but only to the extent granting that power appears to be consistent with the speedy settlement of the estate; and
(5) any other power the court finds is necessary with respect to the operation of the business.
(e) If the order entered under this section gives the personal representative the power to purchase, sell, lease, or otherwise encumber real or personal property:
(1) the purchase, sale, lease, or encumbrance is governed by the terms of the order; and
(2) the personal representative is not required to comply with any other provision of this code regarding the purchase, sale, lease, or encumbrance, including provisions requiring citation or notice.
(f) In determining which powers to grant a personal representative in an order entered under this section, the court shall consider the following factors:
(1) the condition of the estate and the business;
(2) the necessity that may exist for the future sale of the business or of business property to provide for payment of debts or claims against the estate or other lawful expenditures with respect to the estate;
(3) the effect of the order on the speedy settlement of the estate; and
(4) the best interests of the estate.
(g) A personal representative who operates a business under an order entered under this section has the same fiduciary duties as a personal representative who does not operate a business that is part of an estate. The personal representative shall:
(1) in operating the business, consider:
(A) the condition of the estate and the business;
(B) the necessity that may exist for the future sale of the business or of business property to provide for payment of debts or claims against the estate or other lawful expenditures with respect to the estate;
(C) the effect of the order on the speedy settlement of the estate; and
(D) the best interests of the estate; and
(2) report to the court with respect to the operation and condition of the business as part of the accounts required by Parts 11 and 12, Chapter VIII, of this code, unless the court orders the reports regarding the business to be made more frequently or in a different manner or form.
(h) Before purchasing, selling, leasing, or otherwise encumbering any real property of the business in accordance with an order entered under this section, the personal representative shall file a notice in the real property records of the county in which the real property is located. The notice must state:
(1) the name of the decedent;
(2) the county of the court in which the decedent's estate is pending;
(3) the cause number assigned to the pending estate;
(4) that one or more orders have been entered under this section; and
(5) a description of the property that is the subject of the purchase, sale, lease, or other encumbrance.
(i) For purposes of determining a personal representative's powers with respect to a purchase, sale, lease, or other encumbrance of real property of a business that is part of an estate, a third party who deals in good faith with a personal representative with respect to the transaction may rely on the notice under Subsection (h) of this section and an order that is entered under this section and filed as part of the estate records maintained by the clerk of the court in which the estate is pending.