CHAPTER 7. UNIFORM ACT GOVERNING SECURED CREDITORS' DIVIDENDS IN LIQUIDATION PROCEEDINGS
IC 30-2-7
Chapter 7. Uniform Act Governing Secured Creditors' Dividends
in Liquidation Proceedings
IC 30-2-7-1
Definitions
Sec. 1. As used in this chapter, unless the context or
subject-matter requires otherwise:
(a) "Liquidation proceeding" includes all assignments for the
benefit of creditors, whether voluntary or by operation of law;
administration of insolvent decedents' estates; liquidations of
insolvent banks; equity receiverships where the subject under
receivership is insolvent; and any other proceedings for distribution
of assets of any insolvent debtor, whether a person, decedent's estate,
partnership, limited liability company, corporation, or business
association.
(b) "Liquidator" means any person administering assets in any
liquidation proceeding as defined in this chapter.
(c) "Insolvent debtor" means any insolvent person, decedent's
estate, partnership, limited liability company, corporation, or
business association involved in a liquidation proceeding as defined
in this chapter.
(d) "Secured creditor" means a creditor who has either legal or
equitable security for his debt upon any property of the insolvent
debtor of a nature to be liquidated and distributed in a liquidation
proceeding, or a creditor to whom is owed a debt for which such
security is possessed by some indorser, surety, or other person
secondarily liable.
(e) "Creditor's sale" includes any sale effected by the secured
creditor by judicial process or otherwise under the terms of his
contract or the applicable law for the purpose of realizing upon his
security.
(Formerly: Acts 1941, c.50, s.1.) As amended by Acts 1982, P.L.171,
SEC.106; P.L.8-1993, SEC.464.
IC 30-2-7-2
Secured creditors' claim must disclose security
Sec. 2. In a liquidation proceeding every secured creditor's claim
against the general assets shall disclose the nature of the security.
When a decedent's estate already in the course of administration is
judicially declared insolvent or when in an equity receivership it is
determined that the subject under receivership is insolvent, secured
creditors having claims on file which do not comply with this section
shall make disclosure within a time to be fixed by the court.
(Formerly: Acts 1941, c.50, s.2.)
IC 30-2-7-3
Effect of concealment
Sec. 3. Any secured creditor who with intent to evade the
provisions of this chapter fails to disclose the existence of the
security shall not be entitled to receive or retain dividends out of the
general assets, unless he thereafter releases or surrenders to the
liquidator the security which he has failed to disclose, or unless he
procures such release or surrender if the security is in the possession
of an indorser, surety, or other person secondarily liable for the
insolvent debtor.
(Formerly: Acts 1941, c.50, s.3.) As amended by Acts 1982, P.L.171,
SEC.107.
IC 30-2-7-4
Value of security credited upon claims
Sec. 4. Dividends paid to secured creditors shall be computed only
upon the balance due after the value of all security not exempt from
the claims of unsecured creditors and not released or surrendered to
the liquidator, is determined and credited upon the claim secured by
it.
(Formerly: Acts 1941, c.50, s.4.)
IC 30-2-7-5
Determination of value by secured creditor
Sec. 5. (1) By collection. When the asset constituting the security
is an obligation for the payment of money, the secured creditor may
determine its value by collection or by exhausting his remedies
thereon and then surrendering the obligation to the liquidator.
(2) By creditor's sale. When the asset constituting the security is
something other than an obligation for the payment of money, the
secured creditor may determine its value by creditor's sale.
(Formerly: Acts 1941, c.50, s.5.)
IC 30-2-7-6
Alternative determination of value
Sec. 6. Where valuation under the provisions of section 5 of this
chapter is impracticable or would cause undue delay, the court, upon
petition by either the secured creditor or the liquidator, may order the
value of the security determined by any of the following methods:
(1) By compromise, if the secured creditor and the liquidator
agree upon a value. The liquidator may redeem such assets by
payment of the agreed value, if authorized by the court.
(2) By litigation, through proceedings in the liquidation
proceedings. The liquidator may redeem such assets by paying
the value so determined, if authorized by the court.
(3) By liquidator's sale of the assets which, when completed and
approved by the court, shall pass to the purchaser good title,
free and clear of all liens of the secured creditor, such liens to
be transferred to the proceeds of the sale. The order of sale may
be either:
(a) conditional, requiring the sale to be made by the liquidator
only if the secured creditor does not complete a determination
by collection or creditor's sale as set forth in section 5 of this
chapter within a time fixed by the court; or
(b) absolute, requiring the sale to be made by the liquidator
within a time fixed by the court.
Provided, that subdivision (3) shall not apply to security upon real
estate or insolvent decedents' estates administered by the court.
(Formerly: Acts 1941, c.50, s.6.) As amended by Acts 1982, P.L.171,
SEC.108.
IC 30-2-7-7
Exempt security not credited
Sec. 7. When any creditor has legal or equitable security upon
assets which are exempt from process for the satisfaction of
unsecured debts and are duly claimed as exempt by the insolvent
debtor, the value of such security shall not be credited upon the
claim. Amounts realized by the creditor from such security after
liquidation proceedings are begun shall be disregarded in computing
dividends, unless the dividend so computed exceeds the sum actually
owing upon the claim, in which event only the amount owing shall
be paid.
(Formerly: Acts 1941, c.50, s.7.)
IC 30-2-7-8
Uniformity of interpretation
Sec. 8. This chapter shall be so interpreted and construed as to
effectuate its general purpose to make uniform the law of those states
which enact it.
(Formerly: Acts 1941, c.50, s.9.) As amended by Acts 1982, P.L.171,
SEC.109.
IC 30-2-7-9
Short title
Sec. 9. This chapter may be cited as Uniform Act Governing
Secured Creditors' Dividends in Liquidation Proceedings.
(Formerly: Acts 1941, c.50, s.10.) As amended by Acts 1982,
P.L.171, SEC.110.