§ 26-1-4-216 — Insolvency and preference

Indiana § 26-1-4-216

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 4: Bank Deposits and Collections

Text

(a) If an item is in or comes into the
possession of a payor or collecting bank that suspends payment and the
item has not been finally paid, the item must be returned by the
receiver, trustee, or agent in charge of the closed bank to the presenting
bank or the closed bank's customer.
(b) If a payor bank finally pays an item and suspends payments
without making a settlement for the item with its customer or the
presenting bank which settlement is or becomes final, the owner of the
item has a preferred claim against the payor bank.
(c) If a payor bank gives or a collecting bank gives or receives a
provisional settlement for an item and thereafter suspends payments,
the suspension does not prevent or interfere with the settlement's
becoming final if the finality occurs automatically upon the lapse of
certain time or the happening of certain events.
(d) If a collecting bank receives from subsequent parties settlement
for an item, which settlement is or becomes final and the bank
suspends payments without making a settlement for the item with its
customer which settlement is or becomes final, the owner of the item
has a preferred claim against the collecting bank.

Legislative History

As added by P.L.222-1993, SEC.32.