New York § 576 - 576Claims by rightful holders of trading stamps

§ 576. 576Claims by rightful holders of trading stamps

§ 576. Claims by rightful holders of trading stamps. 1. If a trading stamp company defaults in the redemption of its stamps when they are duly presented for redemption by residents of this state who are the rightful holders of such stamps, all such holders of such trading stamps, including retailers in possession of such stamps for issuance to customers, shall be entitled to make claim against such bond. Any such rightful holder of trading stamps may, after such default, file a complaint with the secretary of state, who shall forthwith make a determination whether there has been a default. If said secretary determines that there has been a default, he shall give notice of such determination to the company and, if such default is not corrected within ten days, he shall publish notice of such default in three consecutive publications of one or more newspapers having general circulation throughout this state and therein require that proof of all claims for redemption of the trading stamps of such company be filed with him, together with the trading stamps upon which the claim is based, within six months after the date of the first such publication. The secretary of state shall acknowledge receipt of all trading stamps submitted with such claims and determine the validity of all claims so filed promptly after the expiration of such period. Thereupon the secretary shall be paid by the surety such amount, not exceeding the principal sum of the bond, as shall be necessary to satisfy all valid claims so filed. The secretary shall promptly thereafter make an equitable distribution of the proceeds of the bond to such claimants and shall destroy the trading stamps so surrendered. 2. The assertion of a claim by holders of trading stamps against the bond of a defaulting trading stamp company pursuant to this section shall not affect or impair any other rights or remedies such holders may have against such company under any other statute or at common law. In the pursuit of any such right or remedy, the receipt issued by the secretary of state for trading stamps received in connection with such claims asserted pursuant to this section shall be evidence that persons having such receipts were holders of such stamps prior to their surrender to the secretary. 3. The costs and other charges incurred by the secretary of state in performing the duties set forth in this section shall constitute a proper charge against the trading stamp company which has defaulted, or, in the event of the trading stamp company's failure to pay, against the bond filed by that company, and shall constitute a prior claim against such company or such bond, except that in no event shall the surety be liable for such charge and all other valid claims as an aggregate in excess of the principal sum of the bond.