Nevada Revised Statutes 689.365 – Prepaid contracts: Termination on insolvency or other inability of seller to perform unless assigned; distribution of money in trust fund
1. An executory prepaid contract automatically terminates if the seller or any performer under the contract goes out of business, dies, becomes insolvent or bankrupt, makes an assignment for the benefit of creditors or is otherwise unable to fulfill the obligations under the contract unless, within 30 days after the going out of business, death, insolvency or bankruptcy of the seller, or within any extension of time granted by the Commissioner, the contract is assigned to a holder of a valid seller’s certificate of authority who agrees in writing to accept the liabilities under the contract and agrees to fulfill all obligations set forth therein.
Terms Used In Nevada Revised Statutes 689.365
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Contract: A legal written agreement that becomes binding when signed.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Trustee: A person or institution holding and administering property in trust.
2. Upon any such termination, the money in the trust fund, including earned interest, held by the trustee for the account of the buyer must be distributed by the trustee to the buyer or to a qualified seller or performer assuming the outstanding contractual liabilities, as authorized by the Commissioner.