Sec. 186.312. PRIORITY OF CLAIMS AGAINST UNINSURED STATE TRUST COMPANY

(a) The priority of distribution of assets from the estate of a state trust company the trust deposits of which are not insured by the Federal Deposit Insurance Corporation or its successor shall be in accordance with the order of each class as provided by this section. Every claim in each class shall be paid in full, or adequate money shall be retained for that payment, before a member of the next class may receive any payment. A subclass may not be established within a class, except for a preference or subordination within a class expressly created by contract or other instrument or in the articles of association.

(b) Assets shall be distributed in the following order of priority:

(1) administrative expenses;

(2) approved claims of secured trust deposits to the extent of the value of the security as provided by Section 186.304(a);

(3) approved claims of secured creditors to the extent of the value of the security as provided by Section 186.304(b);

(4) approved claims by beneficiaries of insufficient commingled fiduciary money or missing fiduciary property and approved claims of clients of the state trust company;

(5) other approved claims of general creditors not falling within a higher priority under this section, including unsecured claims for taxes and debts due the federal government or a state or local government;

(6) approved claims of a type described by Subdivisions (1)-(5) that were not filed within the period prescribed by this subchapter; and

(7) claims of capital note or debenture holders or holders of similar obligations and proprietary claims of shareholders, participants, participant-transferees, or other owners according to the terms established by issue, class, or series.

(c) Subject to Sections 186.310 and 186.313, the banking commissioner may make a ratable distribution to approved claimants within a particular class or priority if:

(1) all timely filed and approved claims of a higher priority have been satisfied; and

(2) there is insufficient money to fully satisfy all of those claims, after reserving money for administrative expenses as necessary.

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999.