Rhode Island § 19-12-9 - Receivership

§ 19-12-9. Payment of certain priority claims.

(a) In receivership proceedings under this chapter, distributions on account of priority claims described in § 19-12-7(a)(1), (a)(2), (a)(3) and/or (a)(4) shall be made to the persons or entities entitled to them as soon as sufficient funds are available to the receiver, subject, however, to § 19-12-7(b). The holders of claims entitled to priority under § 19-12-7(a)(2), (a)(3) and/or (a)(4) are relieved of the necessity of filing claims with the receiver.

(b)(1) On the recommendation of the receiver, the court may approve a sale or other transfer of all or any part of the assets of the financial institution or credit union for consideration sufficient to pay in full or in part the liabilities of the financial institution or credit union that are entitled to priority in distribution pursuant to § 19-12-7(a). The consideration for the transfer, whether in the form of immediate funds or the issuance of deferred obligations, as shall be distributed in accordance with § 19-12-7 in any manner and at any time or times as shall be recommended by the receiver, in a distribution plan as provided in the order of the court approving the transfer.

(2) If the transferee that assumes deposit liabilities of a financial institution or credit union entitled to priority under § 19-12-7(a)(3) and/or (a)(4) in a transfer so approved is a financial institution or credit union authorized by law to receive deposits, and its deposits, including the assumed deposits of the financial institution or credit union, are protected by federal deposit insurance, the court, on the recommendation of the receiver, may approve the transfer of assets and assumption of liabilities, in which case the priority claims of depositors whose claims were so assumed will be deemed to have been adequately provided for and the priority granted the claims satisfied. If the transferee is an entity, including any corporate entity specially chartered by the Rhode Island general assembly to acquire assets or assume any deposit liabilities of the financial institution or credit union in receivership under this chapter, that assumes all or part of the deposit liabilities of a financial institution or credit union not as deposits in an operating depository institution, but as liabilities to be paid out of the assets acquired, the court, based on the recommendation of the receiver and the best interests of the depositors whose priority claims are to be paid or assumed by the transferee, may approve the transfer and the transferee’s plan of distribution, including provisions therein that would be authorized under § 19-12-7(b), in which case the claims entitled to priority pursuant to § 19-12-7(a)(3) and/or (a)(4) shall be deemed to have been provided for and satisfied to the extent they have been assumed by the transferee.

(c) A transferee that assumes or pays any claim entitled to priority pursuant to § 19-12-7(a)(2), (a)(3) and/or (a)(4) pursuant to an order entered by the court under subsection (b) shall be subrogated to the claim and priority position of the employees and depositors whose claims have been so assumed or paid.