307.20—Partial liquidation; liquidation upon termination.
(a) Partial liquidation or disallowance of a portion of an RLF Grant.
If the RLF Recipient engages in certain problematic practices, EDA may disallow a corresponding proportion of the Grant or direct the RLF Recipient to transfer loans to an RLF Third Party for liquidation. Problematic practices for which EDA may disallow a portion of an RLF Grant and recover the pro-rata Federal Share (as defined in § 314.5 of this chapter) include but are not limited to the RLF Recipient:
(2)
Having excess cash sequestered for twelve (12) months or longer and EDA has not approved an extension request;
(4)
Failing to disburse the EDA funds in accordance with the time schedule prescribed in the RLF Grant; or
(5)
Determining that it does not wish to further invest in the RLF or cannot maintain operations at the degree originally contemplated upon receipt of the RLF Grant and requests that a portion of the RLF Grant be disallowed, and EDA agrees to allow the disallowance.
(b) Liquidation upon termination.
When EDA approves the termination of an RLF Grant, EDA may assign or transfer assets of the RLF to an RLF Third Party for liquidation.
(2)
The RLF Third Party may be an Eligible Applicant or a for-profit organization not otherwise eligible for Investment Assistance;
(3)
EDA may enter into an agreement with the RLF Third Party to liquidate the assets of one (1) or more RLFs or RLF Recipients;
(4)
EDA may allow the RLF Third Party to retain a portion of the RLF assets, consistent with the agreement referenced in paragraph (c)(3) of this section, as reasonable compensation for services rendered in the liquidation; and
(d) Distribution of proceeds.
The proceeds resulting from any liquidation upon termination shall be distributed in the following order of priority: