§ 42-116-7 - Assumption of liabilities and distribution.
SECTION 42-116-7
§ 42-116-7 Assumption of liabilities anddistribution. – Distributions from the corporation with respect to deposit liabilities assumedfrom eligible institutions are made pursuant to and consistent with §42-116-12 and are subject to subdivisions (1) – (6).
(1) Any distribution to a depositor is subject to any legallyavailable set-off and reduction to the extent permitted by law on account ofany debt or liability of a creditor to the corporation at the time of thedistribution.
(2) Any deposit liability of a creditor of an eligibleinstitution which has been or shall be assumed by the corporation that issecured by a mortgage, security interest, or lien on property in which thecorporation has an interest, is a secured claim to the extent of the value ofthe creditor's interest in the property, or to the extent of the amount thecreditor is entitled to setoff, as the case may be, and is an unsecured claimto the extent that the value of the creditor's interest or the amount subjectto setoff is less than the amount of the claim. Only the unsecured portion ofthe claim of the secured creditor shall participate in a distribution providedfor in § 42-116-12.
(3) Notwithstanding the provision of § 42-116-12, nopayment shall be made by the corporation to any officer, director, or employeeof any eligible institution or of the Rhode Island share and deposit indemnitycorporation or any other person who, with knowledge of the actual or impendinginsolvency and/or the impending closing of an eligible institution or of theactual or impending insolvency of and/or the actual or impending cessation ofbusiness by the Rhode Island share and deposit indemnity corporation, and forthe purpose of avoiding the loss of funds and/or access to funds in anydepository account in any eligible institution, withdrew from any eligibleinstitution any amount of money within thirty (30) days prior to the closing ofthat eligible institution by proclamation of the governor dated January 1, 1991.
(ii) Within forty-five (45) days of the passage of this act,the receiver of the institutions as set forth in § 42-116-37 shallforward, in writing, to the director of the department of business regulation,the name of any officer, director, employee, or elected official, who withdrewin the aggregate from one or more of these institutions a sum of money inexcess of ten thousand dollars ($10,000) during the period November 15, 1990 toDecember 31, 1990.
(iii) Within thirty (30) days of the receipt of the names,the director of business regulation shall notify, in writing, each person named.
(iv) The person named, within thirty (30) days of the receiptof notification from the director of business regulation may presentdocumentary evidence to show that the withdrawal was for legitimate purposes.If the director of business regulation is satisfied with the documentaryevidence, the director may refrain from making public the name of the person.If the director is not satisfied, the director shall publish the names.
(4) Deposit liabilities and distributions on account thereofmade pursuant to this section and § 42-116-12 shall not include anyinterest accrued from the time that the eligible institution from which thosedeposit liabilities arose was petitioned into receivership.
(5) The corporation may adopt any rules and regulations itdeems necessary or desirable in order to clarify and implement this section and§ 42-116-12, to determine deposit liabilities and amounts distributedthereon, to provide administrative procedures to determine disputed claims ormatters of fact with respect thereto, to provide for administrative review andjudicial appeals with respect to disputed or disallowed depositor claims fordistribution and otherwise to accomplish its corporate purposes includingwithout limitation:
(i) The adoption of rules and regulations to provide for theearly distribution of funds from escrow and trust accounts where financiallyfeasible, fair, and necessary to the completion of executed or executorytransactions; and
(ii) The adoption of rules and regulations for the setoff ofassumed deposit liabilities and distributions therefrom against any loanmortgage obligations and other liabilities, and in so doing shall endeavor tomaximize value, to limit deposit liability, and to treat depositors withoffsetting loans fairly and without favoritism.
(6) The corporation shall require that any depositor entitledto receive any payment under the terms of this chapter shall, in considerationof the corporation's making a payment and as a condition precedent to thedepositor's receiving a payment, and only to the extent of the payment and anytolled or lost interest or consequential damages attributable to the payment,execute a total and complete waiver and release of any and all rights, claimsand causes of action, of any nature whatsoever, which that depositor might haveagainst the state or any of its officials or employees in relation to the prorata portion of any funds or accounts that the depositor may have or may havehad on deposit with any eligible institution.