§ 19-12-7. Priority of claims.
(a) When the superior court assumes jurisdiction of a receivership proceeding with respect
to a financial institution or credit union subject to the provisions of this title,
the expenses and claims against the financial institution or credit union shall have
priority in receiving distributions, including (without limitation) any assumption
of liabilities out of the assets of the financial institution or credit union in the
following order; except to the extent otherwise provided by subsection (b) of this
section, pro rata among any class of claimants having priority until the members of
the class have been paid or provided for in full before distribution to any junior
class of claimants:
(1) Reasonable administrative expenses as allowed by the court in connection with the
administration of the receivership estate, including (without limitation) payment
of any loans, together with interest thereon, obtained by the receiver with the approval
of the court to fund the operations of the receivership estate and the administration
of the receivership proceeding, repayable only from the assets in the estate.
(2) Unsecured claims for wages earned by individuals who provided services as employees
to the financial institution or credit union as provided in § 28-14-6.1, in amounts recommended by the receiver subject to the approval of the court.
(3) Subject to subsections (b) and (d) of this section, unsecured claims of depositors
in the financial institution or credit union that does not have, or that has failed
to obtain, federal deposit insurance; provided, however, that any such claim shall
only have priority under this subsection to the extent that, if the financial institution
or credit union had maintained insurance with the Federal Deposit Insurance Corporation
and whether or not the financial institution or credit union would have been eligible
to maintain insurance with the Federal Deposit Insurance Corporation, the deposit
with respect to which the claim relates would have been an "insured deposit� as the
term is defined in the Federal Deposit Insurance Corporation Act (12 U.S.C. § 1813(m)) as in effect as of December 31, 1990, and would have been covered by deposit insurance
under the rules and regulations of the Federal Deposit Insurance Corporation in effect
as of December 31, 1990. For the purpose of applying the preceding sentence, in the
case of a credit union, all types of the credit union's member share accounts, including
regular shares, share certificates, and share draft accounts, except to the extent
the accounts constitute equity ownership interests in the credit union under the terms
of the charter or bylaws of the credit union, shall be deemed an insured deposit.
(4) Subject to subsections (b) and (d), unsecured claims of depositors in the financial
institution or credit union that does not have, or that has failed to obtain, federal
deposit insurance for its deposits, to the extent their deposit claims exceed amounts
recovered under subsection (a)(3).
(5) Unsecured claims of any local, state, or federal taxing agency entitled by law to
priority in distributions from any receivership estate, to the extent of that priority,
in any amounts as shall be approved by the court.
(6) Unsecured claims of all general creditors and depositors of the financial institution
or credit union to the extent not accorded priority pursuant to subsections (a)(1)
through (a)(4), in any amounts as shall be approved by the court.
(b) Distributions entitled to priority under subsection (a)(3) and/or (a)(4) shall be
reduced or limited to the extent that either of the following paragraphs apply:
(1) Any distribution to a depositor pursuant to subsection (a)(3) and/or (a)(4) shall
be subject to any legally available setoff and reduction to the extent of any default
on any debt of the depositor to the financial institution or credit union at the time
of such distribution.
(2) Any distribution to a depositor entitled to priority pursuant to subsection (a)(3)
and/or (a)(4) may be affected, reduced, or extended in time to the extent that the
receiver may recommend, and the court may approve, a plan of distribution with respect
to depositor claims entitled to priority that pays promptly (i) a subclass of the
claims in full up to a stated amount for administrative convenience and (ii) if the
receiver so recommends and the court approves, the stated amount to all other depositors
entitled to priority under subsection (a)(3) and/or (a)(4) whose claims exceed the
stated amount to provide partial and more timely relief for those depositors.
(c) The claim of a creditor that is secured by a mortgage, security interest, or lien
on property in which the financial institution or credit union has an interest is
a secured claim to the extent of the value of the estate's interest in the property
or to the extent of amounts subject 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 so subject
to setoff is less than the amount of the claim as approved by the court. Only the
unsecured portion of the claim of the secured creditor shall participate in a distribution
provided for in subsection (a) hereof.
(d) Notwithstanding the provisions of subsection (a)(3) and/or (a)(4) or the provisions
of § 42-116-7(3)(i) and/or (3)(ii) or § 42-116-12, no priority shall be afforded under subsection (a)(3) and/or (a)(4) to the unsecured
claims of any officer, director or employee of any financial institution or credit
union 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 a financial institution or credit union 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 insolvent financial institution
or credit union, withdrew from any insolvent financial institution or credit union
any amount of money within thirty (30) days prior to the closing of that financial
institution or credit union by proclamation of the governor dated January 1, 1991.