Claims Based Upon Acts or Omissions of the Receiver

RESOLUTION TRUST CORPORATION

12 CFR Part 1635

RIN 3205-AA24

Claims Based Upon Acts or Omissions of the Receiver

agency: Resolution Trust Corporation.

action: Proposed rule.

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summary: The Resolution Trust Corporation (RTC) is proposing to adopt a

rule setting forth procedures applicable to administrative claims based

upon acts or omissions of the RTC as receiver. The rule is intended to

inform potential claimants of the circumstances under which the RTC

will consider claims based upon acts or omissions of the receiver to be

timely filed and to clarify when suit may be filed on these claims. The

rule will thus inform and remind potential claimants of the deadlines

applicable to claims and suits based upon acts or omissions of

receivers. Comments received from the public will be considered in

determining the form of a final rule.

dates: Comments must be received on or before October 24, 1994.

addresses: Written comments concerning the proposed rule should be

addressed to John M. Buckley, Jr., Secretary, Resolution Trust

Corporation, 801 17th Street, NW., Washington, DC 20434-0001. Comments

may be hand-delivered to Room 321 on business days between 9 a.m. and 5

p.m. Comments may also be inspected in the Public Reading Room, 801

17th Street, NW., between 9 a.m. and 5 p.m. on business days.

(Telephone number: 202-416-6940; FAX number: 202-416-4753. These are

not toll-free numbers.)

for further information contact: Munsell St. Clair (Counsel), telephone

202-736-3034.

supplementary information: 12 U.S.C. 1821(d)(13)(D) deprives all courts

of jurisdiction over, inter alia, any claim or action seeking payment

from, or a determination of rights with respect to, the assets of an

insured depository institution for which the RTC has been appointed

receiver and any claim relating to any act or omission of the RTC as

receiver, unless the claims process described in 12 U.S.C. 1821(d) has

first been complied with.

The legislative history of 12 U.S.C. 1821(d) reveals that the dual

purpose behind requiring exhaustion of claims before suit can be filed

is: (1) To minimize costs to the receivership estate and to the

legitimate claimants who share in the distributions from the estate,

and (2) to minimize the burden on federal courts by avoiding needless

litigation. H.R. Rep. No. 101-54(I), 101st Cong., 1st Sess. 2,

reprinted in 1989 U.S. CODE CONG. & ADMIN. NEWS 215. These purposes are

fulfilled by requiring that, before suit can be filed, the receivership

claims process must be exhausted with respect to claims based upon acts

or omissions of the RTC as receiver, since litigation and its

accompanying burden on the receivership estate and the courts may be

avoided if the receiver is given an initial opportunity to allow

meritorious claims outside of litigation.

Thus, both the literal terms of 12 U.S.C. 1821(d)(13)(D) and the

purposes of the statute make it clear that no suit can be maintained

against the RTC as receiver based upon any act or omission of the RTC

as receiver unless and until the claims process has been pursued.

As of March 31, 1994, the RTC held over 533,000 assets, such as

real estate, mortgages and deeds of trust, and commercial and consumer

loans. The RTC, as receiver, has entered into and will continue to

enter into numerous contracts for the sale of these assets. In

addition, the RTC, as receiver, enters into many other contracts

relating to its operations. Further, many additional claims arise

relating to the conduct of receivership affairs.

Because of the number of contracts that the RTC enters into as

receiver and because the RTC, as receiver, acts in a wide variety of

ways, disputes necessarily arise between the RTC and other persons. In

order to fulfill the purposes of the claims process set forth in 12

U.S.C. 1821(d), the RTC is promulgating this proposed rule setting

forth procedures applicable to claims based upon acts or omissions of

the RTC as receiver. (The proposed rule does not address claims against

the RTC in its corporate capacity.) When final, this rule will replace

the Interim Statement of Policy Regarding Procedures to be Used with

Regard to Claims Based upon Acts or Omissions of the Receiver, 59 FR

10663 (March 7, 1994), which will be superseded in its entirety.

Regulatory Flexibility Act Statement

Pursuant to section 605(b) of the Regulatory Flexibility Act, the

RTC hereby certifies that this proposal is not expected to have a

significant economic impact on a substantial number of small entities.

Accordingly, a regulatory flexibility analysis is not required.

List of Subjects in 12 CFR Part 1635

Administrative practice and procedure.

For the reasons set out in the preamble, the Resolution Trust

Corporation proposes to add part 1635 to title 12, chapter XVI, of the

Code of Federal Regulations to read as follows:

PART 1635--CLAIMS BASED UPON ACTS OR OMISSIONS OF THE RECEIVER

Sec.

1635.1 Definitions.

1635.2 Period to file claims.

1635.3 Procedures.

Authority: 12 U.S.C. 1441a(b)(4)(A), (11)(A), 1821(d)(1), (3)(A)

and (4)(A).

Sec. 1635.1 Definitions.

(a) Claim. For purposes of 12 U.S.C. 1821(d)(3) through (13) and

this part, a claim shall include any claim, cause of action, complaint,

counterclaim, crossclaim, third-party claim, affirmative defense, or

demand or request for relief, whether monetary or non-monetary, legal

or equitable, brought by any person or entity whatsoever (regardless of

whether the person or entity is or was a creditor or debtor of the

receivership or of the institution) that:

(1) Seeks payment from, or a determination of rights with respect

to, the assets of any institution for which the RTC has been appointed

receiver (including assets which the RTC may acquire from itself as

receiver) or

(2) Relates to any act or omission of the institution or the

receiver.

(b) Institution. For purposes of 12 U.S.C. 1821(d)(3) through (13)

and this part, an institution or a depository institution shall include

the RTC as conservator of the institution.

(c) Post-Receivership Claim. A Post-Receivership Claim means any

claim based upon any act or omission of the RTC as receiver. A Post-

Receivership Claim includes, but is not limited to, any claim alleging

a tortious act or omission by the receiver, any claim based upon an

agreement of the receiver, any claim based upon an act or omission of

the receiver with respect to an executory agreement or unexpired lease

of the institution, any claim based upon a repudiation by the receiver

of any agreement or lease, and any claim alleging a violation of law by

the receiver; provided, that Post-Receivership Claims shall include

only claims that were not in existence as of the date of the receiver's

appointment and that rely for their existence upon an act or omission

of the RTC as receiver. A Post-Receivership Claim shall not include any

claim in existence as of the date of the appointment of the receiver,

regardless of whether the claim was then contingent, unliquidated, not

matured or not known or discovered.

Sec. 1635.2 Period to file claims.

(a) In general. Any Post-Receivership Claim must be filed with the

receiver within the time limits set forth in this section or the claim

shall be disallowed, the disallowance shall be final, and the claimant

shall have no further rights or remedies with respect to the claim.

(b) Pre-existing contracts. If a Post-Receivership Claim is based

on a contract that is in writing, that was entered into with the RTC as

receiver or as conservator prior to [THE EFFECTIVE DATE OF THE FINAL

RULE], and that contains any term or provision requiring that the claim

be filed with or presented to the institution or to the RTC as

conservator or receiver within a certain period of time or by a certain

date, then the claim must be filed by the earliest of the following

dates:

(1) The date or time set forth in the contract;

(2) The 90th day after the RTC first publishes notice of its

intention to terminate the receivership; or

(3) The date established by any applicable statute of limitations.

(c) Notice. If the receiver mails a notice to a claimant requiring

that a Post-Receivership Claim with proof be filed by a certain date,

then the claim must be filed by the date set forth in the notice or by

the date established by any applicable statute of limitations,

whichever occurs first (unless the claim is based upon a contract

meeting the description set forth in paragraph (b) of this section, in

which case the time limits set forth in paragraph (b) apply). The date

set forth in the notice shall be not less than 90 days after the notice

is mailed (and may be later than the date established pursuant to 12

U.S.C. 1821(d)(3)(B)(i)).

(d) All other cases. In all cases other than those described in

paragraphs (b) and (c) of this section, a Post-Receivership Claim must

be filed by the 90th day after the RTC first publishes notice of its

intention to terminate the receivership or by the date established by

any applicable statute of limitations, whichever occurs first.

(e) No extension to file claims subject to bar of 12 U.S.C.

1821(d)(3)(B)(i) or 1821(d)(5)(C). This section shall apply only to

Post-Receivership Claims and shall not apply to and shall not be

construed as extending the period to file claims described in 12 U.S.C.

1821(d)(3)(B)(i) or 1821(d)(5)(C) for any other claim.

Sec. 1635.3 Procedures.

(a) Applicability of 12 U.S.C. 1821(d). The applicable portions of

12 U.S.C. 1821(d) shall govern any Post-Receivership Claim that is

filed with the receiver. No suit upon any Post-Receivership Claim may

be filed or maintained until the claims process has been exhausted. Any

suit filed must be filed in the courts and in accordance with the time

limits specified in 12 U.S.C. 1821(d)(6) (or 1821(d)(8), when

appropriate). 12 U.S.C. 1821(d)(6) requires, inter alia, that suit be

filed in the district or territorial court of the United States for the

district within which the depository institution's principal place of

business is located or the United States District Court for the

District of Columbia before the end of the 60-day period beginning on

the earlier of the following:

(1) The end of the 180-day period (or any mutually agreed upon

extension thereof) provided in 12 U.S.C. 1821(d)(5)(A)(i) for the

receiver to consider the claim; or

(2) The date of any notice of disallowance of such claim pursuant

to 12 U.S.C. 1821(d)(5)(A)(i).

(b) Contractual provisions requiring forbearance from suit. If a

claim is based upon a written contract that was entered into the RTC as

receiver prior to [THE EFFECTIVE DATE OF THE FINAL RULE] and that

contains any term or provision requiring the claimant to forebear from

filing suit for any period of time less than 180 days after first

presenting or filing a claim with the RTC or receiver, then the

claimant may, but need not, treat the failure of the RTC or receiver to

allow or disallow the claim prior to the end of the contractual

forbearance period as a disallowance pursuant to 12 U.S.C.

1821(d)(5)(A)(i) entitling the claimant to file suit within 60 days

after the end of the contractual forbearance period. If the claimant

does not elect to treat the failure of the RTC or receiver to allow or

disallow the claim prior to the end of the contractual forbearance

period as a disallowance, then, in order to preserve its claim, the

claimant must file suit in the appropriate federal court during the 60-

day period beginning on the earlier of:

(1) The end of the 180-day period (or any mutually agreed upon

extension thereof) beginning on the date the claim is filed; or

(2) The date of any actual notice of disallowance of such claim.

By Order of the Deputy and Acting Chief Executive Officer of the

Resolution Trust Corporation.

Dated at Washington, DC, this 14th day of September 1994.

Resolution Trust Corporation.

John M. Buckley, Jr.,

Secretary.

[FR Doc. 94-23242 Filed 9-21-94; 8:45 am]

BILLING CODE 6714-01-M