2023 New Hampshire Revised Statutes › Title XXXVII - Insurance › Chapter 420-D - Continuing Care Communities › Section 420-D:16 - Rehabilitation or Liquidation.

420-D:16 Rehabilitation or Liquidation. –
I. The commissioner may, if it is in the best interest of the residents, petition the appropriate court to appoint a trustee to rehabilitate or liquidate a facility. Such rehabilitation or liquidation shall occur only if the commissioner finds, after proper notice and hearing, any of the following:
(a) That a provider is insolvent or bankrupt or in danger of becoming insolvent or bankrupt.
(b) That a provider has failed to maintain required liquid reserves under RSA 420-D:8.
(c) That any part of the reserve fund escrow amount under RSA 420-D:10 has been or is about to be released in violation of RSA 420-D:10.
(d) That a provider has been or is about to become unable to meet the cash flow or income projections for the period.
(e) That the certificate of authority has been suspended or revoked.
(f) That the provider named in a certificate has sold a majority interest or transferred management control to others without prior notification and approval by the commissioner.
II. A rehabilitation order shall authorize the commissioner, or the trustee, to take possession of the property of the provider, including all facilities owned by the provider within the state, to operate, including the employment or discharge of any facility employees as he may determine necessary, and to manage and take other measures the court may direct as necessary. The commissioner, trustee, provider, or the court on its own motion may petition for removal of a rehabilitation order and return the management of the facility to the provider, if the provider demonstrates that the objectives of the original order have been met and that no further jeopardy to the residents exists.
III. If attempts to rehabilitate the facility fail, the commissioner may apply to the court for an order to liquidate. A liquidation order, however, shall not require a prior rehabilitation order. An order to liquidate shall automatically revoke the certificate of authority for all facilities of the provider and shall include an order to liquidate all facilities owned by such provider.
IV. In applying for an order to rehabilitate or liquidate, the commissioner shall consider the best interests of the residents who have contracted for continuing care at the facility. The proceeds of liquidation shall be paid to other providers as full or partial entrance fees for the affected residents or shall otherwise be used on behalf of the residents of the facility being liquidated. Except as provided in paragraph V of this section, in the event of liquidation, all continuing care agreements with a provider shall be deemed preferred claims against the assets of the provider.
V. A provider may avoid a rehabilitation order by posting a bond in an amount which is satisfactory to the commissioner. The bond shall be from a maker in this state who is acceptable to the commissioner and shall be in favor of the commissioner on behalf of those entitled to refunds or damages. It shall be in an amount sufficient to cover any refunds due the residents plus other amounts as determined necessary by the commissioner to protect the residents. Nothing in this chapter shall be construed to impair the priority, with respect to the lien property, of mortgages, security agreements, lease agreements, or installment sales agreements on property not otherwise encumbered which have been entered into by a provider with an issuer of bonds or notes and bonds which are secured by a resolution, ordinance, or indenture of trust if such mortgages or agreements were duly recorded at least 4 months prior to the institution of liquidation proceedings.
Source.
1988, 44:2, eff. Jan. 1, 1989.