Maine Revised Statutes Title 10 Sec. 1495-I – Insolvency and liquidation
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1. Voluntary liquidation. A payroll processor who voluntarily ceases to do business in the State is subject to the following provisions.
A. Prior to voluntarily ceasing business as a payroll processor, a payroll processor shall:
(1) Notify the administrator of the proposed termination at least 30 days prior to its effective date;
(2) Notify all employers in writing of the proposed termination at least 30 days prior to its effective date;
(3) Provide all employers with detailed final accountings of all accounts;
(4) Remit all money held by the payroll processor to each respective employer or the appropriate taxing authority; and
(5) Return its license to the administrator for cancellation. [PL 2003, c. 668, §6 (NEW); PL 2003, c. 668, §12 (AFF).]
B. When terminating a business, a payroll processor whose contract with an employer does not authorize the processor to assign the account to another processor may not transfer the account to another processor without first securing the written permission of the employer. [PL 2003, c. 668, §6 (NEW); PL 2003, c. 668, §12 (AFF).]
[PL 2003, c. 668, §6 (NEW); PL 2003, c. 668, §12 (AFF).]
Terms Used In Maine Revised Statutes Title 10 Sec. 1495-I
- Administrator: means , except in cases in which the payroll processor is a supervised financial organization or a wholly owned subsidiary of a supervised financial organization, the Superintendent of Consumer Credit Protection within the Department of Professional and Financial Regulation. See Maine Revised Statutes Title 10 Sec. 1495
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Contract: A legal written agreement that becomes binding when signed.
- Employer: means a person that maintains an office or otherwise transacts business in this State and makes payment of wages taxable under Title 36, Part 8 to a resident or nonresident individual. See Maine Revised Statutes Title 10 Sec. 1495
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- in writing: include printing and other modes of making legible words. See Maine Revised Statutes Title 1 Sec. 72
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Payroll processor: means a person that provides payroll processing service for one or more employers. See Maine Revised Statutes Title 10 Sec. 1495
- Personal property: All property that is not real property.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Uphold: The decision of an appellate court not to reverse a lower court decision.
2. Involuntary liquidation. A payroll processor who is no longer eligible to do business in this State is subject to the following provisions.
A. If, upon examination of a payroll processor, the administrator is of the opinion that the payroll processor is insolvent or can no longer obtain a surety bond or when the license of a payroll processor has expired or terminated for any reason, the administrator may appoint a receiver who shall proceed to close the payroll processor. The person appointed by the administrator as a receiver may be the administrator, a deputy or such other person as the administrator may choose, and a certified copy of the order making such appointment is evidence of the appointment. A receiver has the power and authority provided in this chapter and such other powers and authority as may be expressed in the order of the administrator. If the administrator or a deputy is appointed receiver, no additional compensation need be paid, but any reasonable and necessary expenses as a receiver must be paid by the processor. If another person is appointed, then the compensation of the receiver must be paid from the assets of that processor. [PL 2003, c. 668, §6 (NEW); PL 2003, c. 668, §12 (AFF).]
B. Upon taking possession of the property and business of a payroll processor under this section, the receiver:
(1) May collect money due to the administrator and perform all acts necessary to conserve the payroll processor’s assets and business and shall proceed to liquidate the payroll processor’s affairs;
(2) Shall collect all debts due and claims belonging to the payroll processor and may sell or compound all bad or doubtful debts;
(3) May sell, for cash or other consideration or as provided by law, all or any part of the real and personal property of the payroll processor;
(4) May take, in the name of the administrator, a mortgage on the real property from a bona fide purchaser to secure the whole or part of the purchase price; and
(5) May borrow money and issue evidence of indebtedness therefor. To secure the repayment of this money, the receiver may mortgage, pledge, transfer in trust or hypothecate any of the property of the payroll processor, whether real, personal or mixed, superior to any charge for expenses of liquidation. [PL 2003, c. 668, §6 (NEW); PL 2003, c. 668, §12 (AFF).]
C. The assets of the payroll processor in liquidation, exclusive of any bond proceeds, must be disbursed in the following order:
(1) First, the payment of the costs and expenses of liquidation;
(2) Second, payment of payroll, tax and unemployment insurance premium funds held by the payroll processor;
(3) Third, payment of all debts, claims and obligations owed by the payroll processor;
(4) Fourth, the payment of claims otherwise proper that were not filed within the prescribed time; and
(5) Fifth, the payment of any obligation expressly subordinated to claims entitled to the priority established by subparagraphs (1) to (3). [PL 2003, c. 668, §6 (NEW); PL 2003, c. 668, §12 (AFF).]
[PL 2003, c. 668, §6 (NEW); PL 2003, c. 668, §12 (AFF).]
3. Judicial review. A payroll processor closed by action of the administrator pursuant to this chapter may bring an action challenging the administrator’s appointment of receiver in Superior Court of Kennebec County or of the county in which the processor transacts business within 10 days after the administrator appoints a receiver. The court shall uphold the administrator’s finding that a payroll processor is insolvent or that its condition is such as to render its further proceedings hazardous to the public or to those having funds in its custody and shall uphold the appointment of a receiver unless the court finds that the administrator’s action was arbitrary and capricious.
[PL 2003, c. 668, §6 (NEW); PL 2003, c. 668, §12 (AFF).]
SECTION HISTORY
PL 2003, c. 668, §6 (NEW). PL 2003, c. 668, §12 (AFF).