2023 Rhode Island General Laws › Title 42 - State Affairs and Government › Chapter 42-116 - Rhode Island Depositors Economic Protection Corporation › Section 42-116-7. - Assumption of liabilities and distribution.

§ 42-116-7. Assumption of liabilities and distribution.
Distributions from the corporation with respect to deposit liabilities assumed from eligible institutions are made pursuant to and consistent with § 42-116-12 and are subject to subdivisions (1) — (6).
(1)
Any distribution to a depositor is subject to any legally available set-off and reduction to the extent permitted by law on account of any debt or liability of a creditor to the corporation at the time of the distribution.
(2)
Any deposit liability of a creditor of an eligible institution which has been or shall be assumed by the corporation that is secured by a mortgage, security interest, or lien on property in which the corporation has an interest, is a secured claim to the extent of the value of the creditor’s interest in the property, or to the extent of the amount the creditor is entitled to setoff, as the case may be, and is an unsecured claim to the extent that the value of the creditor’s interest or the amount subject to setoff is less than the amount of the claim. Only the unsecured portion of the claim of the secured creditor shall participate in a distribution provided for in § 42-116-12.
(3)(i)
Notwithstanding the provision of § 42-116-12, no payment shall be made by the corporation to any officer, director, or employee of any eligible institution or of the Rhode Island share and deposit indemnity corporation or any other person who, with knowledge of the actual or impending insolvency and/or the impending closing of an eligible institution or of the actual or impending insolvency of and/or the actual or impending cessation of business by the Rhode Island share and deposit indemnity corporation, and for the purpose of avoiding the loss of funds and/or access to funds in any depository account in any eligible institution, withdrew from any eligible institution any amount of money within thirty (30) days prior to the closing of that eligible institution by proclamation of the governor dated January 1, 1991.
(ii)
Within forty-five (45) days of the passage of this act, the receiver of the institutions as set forth in § 42-116-37 shall forward, in writing, to the director of the department of business regulation, the name of any officer, director, employee, or elected official, who withdrew in the aggregate from one or more of these institutions a sum of money in excess of ten thousand dollars ($10,000) during the period November 15, 1990 to December 31, 1990.
(iii)
Within thirty (30) days of the receipt of the names, the director of business regulation shall notify, in writing, each person named.
(iv)
The person named, within thirty (30) days of the receipt of notification from the director of business regulation may present documentary evidence to show that the withdrawal was for legitimate purposes. If the director of business regulation is satisfied with the documentary evidence, the director may refrain from making public the name of the person. If the director is not satisfied, the director shall publish the names.
(4)
Deposit liabilities and distributions on account thereof made pursuant to this section and § 42-116-12 shall not include any interest accrued from the time that the eligible institution from which those deposit liabilities arose was petitioned into receivership.
(5)
The corporation may adopt any rules and regulations it deems necessary or desirable in order to clarify and implement this section and § 42-116-12, to determine deposit liabilities and amounts distributed thereon, to provide administrative procedures to determine disputed claims or matters of fact with respect thereto, to provide for administrative review and judicial appeals with respect to disputed or disallowed depositor claims for distribution and otherwise to accomplish its corporate purposes including without limitation:
(i)
The adoption of rules and regulations to provide for the early distribution of funds from escrow and trust accounts where financially feasible, fair, and necessary to the completion of executed or executory transactions; and
(ii)
The adoption of rules and regulations for the setoff of assumed deposit liabilities and distributions therefrom against any loan mortgage obligations and other liabilities, and in so doing shall endeavor to maximize value, to limit deposit liability, and to treat depositors with offsetting loans fairly and without favoritism.
(6)
The corporation shall require that any depositor entitled to receive any payment under the terms of this chapter shall, in consideration of the corporation’s making a payment and as a condition precedent to the depositor’s receiving a payment, and only to the extent of the payment and any tolled or lost interest or consequential damages attributable to the payment, execute a total and complete waiver and release of any and all rights, claims and causes of action, of any nature whatsoever, which that depositor might have against the state or any of its officials or employees in relation to the pro rata portion of any funds or accounts that the depositor may have or may have had on deposit with any eligible institution.
History of Section.
P.L. 1991, ch. 3, § 4; P.L. 1992, ch. 9, § 1.