Current through Register Vol. 54, No. 12, March 23, 2024
(a)
Whenever the Commissioner has been appointed the rehabilitator of, or has been
authorized to appoint a trustee to rehabilitate, a provider or facility under
section 16 of the act (40 P. S. §
3216), the rehabilitation shall be conducted
in compliance with the act and pertinent standards and procedures contained in
Article V.
(b) Whenever the
Commissioner has been appointed the liquidator of, or has been authorized to
appoint a trustee to liquidate, a provider or facility under section 16 of the
act (40 P. S. §
3216), the
liquidation shall be conducted in compliance with the act and pertinent
standards and procedures contained in Article V.
(c) In applying Article V standards and
procedures to a rehabilitation or liquidation under the act, the following
phrases in Article V shall have the following meanings:
(1) A reference to insurer in Article V shall
be deemed a reference to the provider or facility for whom a rehabilitator or
liquidator has been appointed.
(2)
A reference to policyholder, certificate holder or insured in Article V shall
be deemed a reference to a resident, or prospective resident who has
transferred money or other property to a provider.
(3) A reference to a policy or coverage in
Article V shall be deemed a reference to a resident's agreement.
(4) A reference to a premium in Article V
shall be deemed a reference to the entrance fee, periodic fees or other charges
payable by a resident or prospective resident to a provider.
(5) If the provisions of Article V are
determined to be in conflict with the act, the requirements of the act shall
control.
(d) Upon
liquidation, the distribution of unsecured claims from the provider's or
facility's estate shall be made in the order of priority set forth in this
subsection. Every claim in each class shall be paid in full or adequate funds
retained for payment before the members of the next class receive payment. No
subclasses shall be established within a class.
(1) Debts due to employes for services
performed to the extent they do not exceed $1,000 and represent payment for
services performed within 1 year before the filing of the petition for
liquidation. Officers and directors shall not be entitled to the benefit of
this priority.
(2) Costs and
expenses of administration of the liquidation, including but not limited to,
the following:
(i) Actual and necessary costs
of preserving or recovering the assets of the provider or facility.
(ii) Compensation for services rendered in
the liquidation.
(iii) Necessary
filing fees.
(iv) Fees and mileage
payable to witnesses.
(v)
Reasonable attorney's fees for the defense and appeal of a proceeding under
this section, subject to the approval of the administrative or judicial body
having jurisdiction over the proceeding. The reasonableness of attorney's fees
shall include an evaluation of the time expended and rates charged in light of
the provider's or facility's assets at the time a petition for liquidation was
filed.
(3) Claims under a
resident's agreement, including claims for refunds by residents of the
liquidated provider or facility or prospective residents who have transferred
money or other property to a provider. Claims for which indemnification is
provided by other benefits or advantages recovered by the claimant shall not be
included in the class, other than benefits or advantages recovered or
recoverable in discharge of familial obligations of support.
(4) Claims of general creditors.
(5) Claims of the Federal, State or local
government. Claims, including those of a governmental body, for a penalty or
forfeiture shall be allowed in this class only to the extent of the pecuniary
loss sustained from the act, transaction, or proceeding out of which the
penalty or forfeiture arose, with reasonable and actual costs occasioned
thereby. The remainder of these claims shall be postponed to the class of
claims under paragraph (7).
(6)
Claims filed late and claims or portions of claims the payment of which is
provided by other benefits or advantages recovered by the claimant.
(7) Claims for surplus or contribution notes
or similar obligations and claims for penalties or forfeitures postponed from
paragraph (5).
(8) Claims of
shareholders or other owners.