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2.8 Determination of Claims Against the Covered Financial Company

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2.8 Determination of Claims Against the Covered Financial Company

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            2.8.       Determination of Claims Against the Covered Financial Company.   The FDIC as receiver is charged with making determinations regarding claims related to the covered financial company in accordance with the requirements established by the Act and by regulations issued by the FDIC for covered financial company receiverships.  [§ 210(a)(2)]

                        2.8.1.      Notice to Creditors.  The FDIC is required to publish notice to creditors of a covered financial company by a specified date which shall be no earlier than 90 days after the date of publication.  The FDIC is also required to mail notice to creditors.

                        2.8.2.      FDIC Response to Claims; Recognition of Secured Claims.  Prior to 180 days after the FDIC receives a claim (unless extended by agreement with the claimant), the FDIC is to notify a claimant whether it accepts or objects to the claim.  The FDIC is authorized to object to any portion of a claim by a creditor, claim of security, preference, setoff, or priority that is not proven to the satisfaction of the FDIC, except that this provision does not apply to any extension of credit from a Federal Reserve Bank or the FDIC to the covered financial company, or to any legally enforceable and perfected security interests in the assets of the covered financial company, subject to the limitations for unsecured claims.

                                          Expedited Determination of Certain Claims.  The FDIC is required to establish a procedure for expedited relief outside of the normal claims process for any claimant who alleges the existence of a legally valid and enforceable or perfected security interest in property of a covered financial company, and that irreparable injury will occur if the normal claims procedure is followed.  In such instances, the FDIC is required to make a determination prior to the end of the 90 day period.                                 

                        2.8.3.      Treatment of Undersecured Claims.  In the case of a claim against a covered financial company that is secured by any property or other asset of such company, the FDIC may treat the portion of such claim which exceeds an amount equal to fair market value of such property or other asset as an unsecured claim and may not make any payment with respect to such unsecured portion of the claim, except in connection with the disposition of all claims of unsecured creditors.

                        2.8.4.      Judicial Determination of Claims.  A claimant may file suit on a claim in the U.S. District Court for the district in which the principal place of business of the covered financial institution is located.  Such a claim must be filed before the end of a specified 60 day period.  If a claimant fails to file a timely suit, the disallowance of the claim will be final.

                        2.8.5.      Agreements Against the Interest of the FDIC.  The Act contains a provision, similar to one in the FDI Act that has been the subject of much litigation, which provides that no agreement that tends to diminish or defeat the interest of the FDIC as receiver in any asset acquired by the receiver shall be valid against the receiver, unless the agreement (i) is in writing, (ii) was executed by an authorized party at the covered financial company, or confirmed in the ordinary course of business by the covered financial company, and (iii) has been, since the time of its execution, an official record of the company or the party claiming under the agreement, and the claimant provides documentation, acceptable to the receiver, of such agreement and its authorized execution or confirmation by the covered financial company.         

                        2.8.6.     Payment of Claims.  The FDIC as receiver may, in its discretion and to the extent funds are available, pay creditor claims that are allowed by the receiver or are determined by the final judgment of a court.  The FDIC as receiver may, in its sole discretion, pay dividends on proven claims.  The FDIC may prescribe rules to establish an interest rate for or to make payments of post-insolvency interest to creditors holding proven claims against the receivership of covered financial company, except that no such interest shall be paid until the FDIC as receiver has satisfied the principal amount of all creditor claims.