§ 5115. Liquidation.

(a) With respect to Guaranteed Farm Borrower Loans, Liquidation shall follow the procedures required by USDA; provided, however, that any reports made to USDA in connection with such Liquidation shall also be given to the Agency. If no such procedures exist, the procedures specified in subsection (b) shall apply.

(b) With respect to Liquidation of a Nonguaranteed Farm Borrower Loan, a Liquidation plan shall be prepared by the Farm Lender and delivered to the Agency. The Liquidation plan shall specify the steps Farm Lender intends to take for Liquidation of the Farm Borrower Loan, including proposed costs. Unless the Farm Borrower receives written objections to the Liquidation plan from the Agency within fourteen days of mailing the plan to the Agency, the plan shall be deemed approved by the Agency. In the event Farm Lender receives a written objection to the plan from the Agency within the fourteen days, the Agency and Farm Lender shall negotiate a mutually acceptable Liquidation plan.

(c) Liquidation recoveries made in connection with Nonguaranteed Farm Borrower Loans shall be applied in the following order of priority.

(1) To pay Liquidation costs approved by the Agency.

(2) To pay accrued interest and late fees.

(3) To pay principal.

(4) To pay fees owed to the Farm Lender, pursuant to Section 5118.

(d) With respect to Liquidation in connection with either Guaranteed or Nonguaranteed Farm Borrower Loans, the Farm Lender shall not initiate any judicial remedy without the prior written approval of the Agency.

HISTORY

1. Repealer and new section filed 2-1-94 as an emergency; operative 2-1-94 (Register 94, No. 5). A Certificate of Compliance must be transmitted to OAL by 8-1-94 pursuant to Corporations Code section 14024 or emergency language will be repealed by operation of law on the following day. For prior history, see Register 89, No. 8.

2. Amendment filed 12-27-2004 as a deemed emergency pursuant to Corporations Code section 14024; operative 12-27-2004 (Register 2004, No. 53). A Certificate of Compliance must be transmitted to OAL by 6-27-2005 or emergency language will be repealed by operation of law on the following day.

3. Editorial correction of History2 (Register 2005, No. 27).

4. Certificate of Compliance as to 12-27-2004 order, including amendment of subsection (b) and Note, transmitted to OAL 5-25-2005 and filed 7-7-2005 (Register 2005, No. 27).

Note

Note: Authority cited: Section 14024, Corporations Code. Reference: Sections 14067 and 14070, Corporations Code.