7-2-15 - Priority of obligations, expenses, and claims -- Distribution of balance of assets.
7-2-15. Priority of obligations, expenses, and claims -- Distribution of balance ofassets.
(1) The following obligations, expenses, and claims have the following priority:
(a) first, any obligation the commissioner may have under Subsection 7-2-6(3)(b) to bebound by the terms, covenants, and conditions of obligations secured by assets or property of theinstitution;
(b) second, administrative expenses, including those allowed under Section 7-2-14;
(c) third, unsecured claims for wages, salaries, or commissions, including vacation,severance, or sick leave pay, earned by an individual within 90 days before the date of thecommissioner's possession, in an amount not exceeding $2,000 for each individual;
(d) fourth, claims of depositors. Any federal deposit insurance agency or other depositinsurer is subrogated to all rights of the depositors against the institution, its officers and directors,and its persons in control of the institution as control is defined in Section 7-1-103 to the extent ofall payments made for the benefit of the depositors. "Payments," as used in this subsection,includes arrangements by a federal deposit insurance agency for the assumption or payment of thedeposit liabilities by another institution whose deposits are insured by a federal deposit insuranceagency. The right of any agency of the United States insuring deposits or savings obligations tobe subrogated to the rights of depositors upon payment of their claims may not be less extensivethan the law of the United States provides with respect to subrogation to the rights of depositors innational banks. For the purposes of this section, a contractual commitment to advance funds,including a standby letter of credit, may not be considered a deposit liability of the institution;
(e) fifth, all other unsecured claims in amounts allowed by the court, including claims ofsecured creditors to the extent the amount of their claims exceed the present fair market value oftheir collateral. The claim of a lessor for damages resulting from the termination of a lease ofproperty may not be allowed in an amount in excess of the rent reserved by the lease, withoutacceleration, for 60 days after the lessor repossessed the leased property, or the leased propertywas surrendered to the lessor, whichever first occurs, whether before or after the commissionertook possession of the institution, plus any unpaid rent due under the lease, without acceleration,on the date of possession or surrender. A claim for damages resulting from the termination of anemployment contract, may not be allowed in an amount in excess of the compensation providedby the contract, without acceleration, for 90 days after the employee was directed to terminate, orthe employee terminated, performance under the contract, whichever first occurs, whether beforeor after the commissioner took possession of the institution, plus any unpaid compensation dueunder the contract, without acceleration, on the date the employee was directed to terminate or theemployee terminated performance. Claims for damages resulting from the termination ofemployment contracts of persons who were in control of the institution, as control is defined inSection 7-1-103, are not entitled to priority under this subsection. Claims for damages for breachof a commitment to advance funds shall be limited to the amount due and owing by the institutionon the date the commissioner took possession of the institution;
(f) sixth, claims for debt that are subordinated under the provisions of a subordinationagreement or other instrument;
(g) seventh, claims of persons who were at any time in control of the institution as controlis defined in Section 7-1-103; and
(h) eighth, all other claims.
(2) The commissioner shall classify each claim presented for priority purposes under
Subsection (1) and shall indicate the classification on any certificate issued under the provisionsof Subsection 7-2-6(11). This classification is final, subject to review by the court upon a timelyobjection filed under Subsection 7-2-6(9).
(3) When the commissioner has paid to each depositor and creditor of the institutionwhose claims have been proved and allowed the full amount of the claim, has made properprovision for unclaimed or unpaid deposits or dividends, and has paid all the expenses of theliquidation, he shall distribute the balance of the assets of the institution in his possession amongthe shareholders of the institution in proportion to the holdings and classes of this stock. Unless acourt of competent jurisdiction determines otherwise, the shareholders shall be determined by thebooks and records of the institution as of the date the commissioner took possession.
Amended by Chapter 49, 1995 General Session