Current through Register Vol. 54, No. 49, December 7, 2024
Section 151.13 - Rehabilitation and liquidation(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.The provisions of this § 151.13 adopted March 15, 1985, effective 3/16/1985, 15 Pa.B. 1051.