(a)  A transfer made or obligation incurred by any financial institution closed by proclamation of the governor dated January 1, 1991, is voidable as to any depository creditor of record of any such financial institution as of January 1, 1991, if the transfer or obligation involved either:

(1)  The withdrawal of deposits from the financial institution by any officer, director, or employee of the financial institution or of the Rhode Island share and deposit indemnity corporation, with knowledge of the actual or impending insolvency or the impending closing of the financial institution or of the actual or impending insolvency of or the actual or impending cessation of business by the Rhode Island share and deposit indemnity corporation, and for the purpose of avoiding the loss of funds or access to funds in any depository account in the financial institution;

(2)  The encumbrance of any assets of the financial institution to or for the benefit of any officer, director, or employee of the financial institution or of the Rhode Island share and deposit indemnity corporation, with knowledge of the actual or impending insolvency or the impending closing of the financial institution or of the actual or impending insolvency of or the actual or impending cessation of business by the Rhode Island share and deposit indemnity corporation, and for the purpose of avoiding the loss of funds or access to funds in any depository account in the financial institution; or

(3)  A transfer or obligation defined as voidable under § 6-16-4 or § 6-16-5.

Terms Used In Rhode Island General Laws 6-16-5.1

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Creditor: means a person who has a claim. See Rhode Island General Laws 6-16-1
  • 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.
  • Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium, and retrievable in perceivable form. See Rhode Island General Laws 6-16-1
  • Transfer: means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or other encumbrance. See Rhode Island General Laws 6-16-1

(b)  In addition to any remedies provided by § 6-16-7, (1) any financial institution closed by proclamation of the governor dated January 1, 1991; (2) any assignees of and successors in interest to any such financial institution; and (3) any depository creditor of record of any such financial institution as of January 1, 1991, who suffers monetary loss as a result of a transfer or conveyance defined as voidable under this section or who is otherwise aggrieved by the transfer or conveyance, shall have a private cause of action at law and in equity against any officer, director, or employee of the financial institution or of the Rhode Island share and deposit indemnity corporation to whom the subject transfer was made or to whom or for whose benefit any assets of the financial institution were encumbered.

History of Section.
P.L. 1991, ch. 3, § 5; P.L. 2014, ch. 528, § 14; P.L. 2018, ch. 141, § 2; P.L. 2018, ch. 236, § 2.