227 
regulated entity, or to minimize the 
amount of any loss realized upon the 
sale or other disposition of the assets 
of the regulated entity; and 
‘‘(II) all creditors that are simi-
larly situated under subsection (c)(1) 
receive not less than the amount pro-
vided in subsection (e)(2). 
‘‘(v) LIMITATION
ON
TRANSFER
OF 
LIABILITIES.—Notwithstanding any other 
provision of law, the aggregate amount of 
liabilities of a regulated entity that are 
transferred to, or assumed by, a limited- 
life regulated entity may not exceed the ag-
gregate amount of assets of the regulated 
entity that are transferred to, or purchased 
by, the limited-life regulated entity. 
‘‘(8) REGULATIONS.—The Agency may promul-
gate such regulations as the Agency determines to 
be necessary or appropriate to implement this sub-
section. 
‘‘(9) POWERS
OF
LIMITED-LIFE
REGULATED 
ENTITIES.— 
‘‘(A) IN GENERAL.—Each limited-life regu-
lated entity created under this subsection shall 
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have all corporate powers of, and be subject to 
the same provisions of law as, the regulated en-
tity in default or in danger of default to which 
it relates, except that— 
‘‘(i) the Agency may— 
‘‘(I) remove the directors of a 
limited-life regulated entity; 
‘‘(II) fix the compensation of 
members of the board of directors and 
senior management, as determined by 
the Agency in its discretion, of a lim-
ited-life regulated entity; and 
‘‘(III) indemnify the representa-
tives 
for 
purposes 
of 
paragraph 
(1)(B), and the directors, officers, em-
ployees, and agents of a limited-life 
regulated entity on such terms as the 
Agency determines to be appropriate; 
and 
‘‘(ii) the board of directors of a lim-
ited-life regulated entity— 
‘‘(I) shall elect a chairperson who 
may also serve in the position of chief 
executive officer, except that such per-
son shall not serve either as chair-
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229 
person or as chief executive officer 
without the prior approval of the 
Agency; and 
‘‘(II) may appoint a chief execu-
tive officer who is not also the chair-
person, except that such person shall 
not serve as chief executive officer 
without the prior approval of the 
Agency. 
‘‘(B) STAY OF JUDICIAL ACTION.—Any ju-
dicial action to which a limited-life regulated 
entity becomes a party by virtue of its acquisi-
tion of any assets or assumption of any liabil-
ities of a regulated entity in default shall be 
stayed from further proceedings for a period of 
not longer than 45 days, at the request of the 
limited-life regulated entity. Such period may 
be modified upon the consent of all parties. 
‘‘(10) NO FEDERAL STATUS.— 
‘‘(A) AGENCY STATUS.—A limited-life reg-
ulated entity is not an agency, establishment, or 
instrumentality of the United States. 
‘‘(B) 
EMPLOYEE
STATUS.—Representa-
tives for purposes of paragraph (1)(B), interim 
directors, directors, officers, employees, or 
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agents of a limited-life regulated entity are not, 
solely by virtue of service in any such capacity, 
officers or employees of the United States. Any 
employee of the Agency or of any Federal in-
strumentality who serves at the request of the 
Agency as a representative for purposes of 
paragraph (1)(B), interim director, director, of-
ficer, employee, or agent of a limited-life regu-
lated entity shall not— 
‘‘(i) solely by virtue of service in any 
such capacity lose any existing status as 
an officer or employee of the United States 
for purposes of title 5, United States Code, 
or any other provision of law; or 
‘‘(ii) receive any salary or benefits for 
service in any such capacity with respect to 
a limited-life regulated entity in addition to 
such salary or benefits as are obtained 
through employment with the Agency or 
such Federal instrumentality. 
‘‘(11) AUTHORITY TO OBTAIN CREDIT.— 
‘‘(A) IN
GENERAL.—A limited-life regu-
lated entity may obtain unsecured credit and 
issue unsecured debt. 
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231 
‘‘(B) INABILITY TO OBTAIN CREDIT.—If a 
limited-life regulated entity is unable to obtain 
unsecured credit or issue unsecured debt, the 
Director may authorize the obtaining of credit 
or the issuance of debt by the limited-life regu-
lated entity— 
‘‘(i) with priority over any or all of 
the obligations of the limited-life regulated 
entity; 
‘‘(ii) secured by a lien on property of 
the limited-life regulated entity that is not 
otherwise subject to a lien; or 
‘‘(iii) secured by a junior lien on prop-
erty of the limited-life regulated entity that 
is subject to a lien. 
‘‘(C) LIMITATIONS.— 
‘‘(i) IN
GENERAL.—The Director, 
after notice and a hearing, may authorize 
the obtaining of credit or the issuance of 
debt by a limited-life regulated entity that 
is secured by a senior or equal lien on 
property of the limited-life regulated entity 
that is subject to a lien (other than mort-
gages that collateralize the mortgage- 
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backed securities issued or guaranteed by 
an enterprise) only if— 
‘‘(I) the limited-life regulated en-
tity is unable to otherwise obtain such 
credit or issue such debt; and 
‘‘(II) there is adequate protection 
of the interest of the holder of the lien 
on the property with respect to which 
such senior or equal lien is proposed 
to be granted. 
‘‘(D) BURDEN OF PROOF.—In any hearing 
under this subsection, the Director has the bur-
den of proof on the issue of adequate protec-
tion. 
‘‘(12) AFFECT ON DEBTS AND LIENS.—The re-
versal or modification on appeal of an authorization 
under this subsection to obtain credit or issue debt, 
or of a grant under this section of a priority or a 
lien, does not affect the validity of any debt so 
issued, or any priority or lien so granted, to an enti-
ty that extended such credit in good faith, whether 
or not such entity knew of the pendency of the ap-
peal, unless such authorization and the issuance of 
such debt, or the granting of such priority or lien, 
were stayed pending appeal. 
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