By Nazario Rodriguez Jr.
Horizon news staff

Delegate Jonathan Isechal yesterday said that the $3.3 million loan that President Remengesau was able to negotiate during a state visit in Taiwan to help resolve the cash strapped Pacific Savings Bank, which is now under an Financial Institution Commission (FIC) receivership, can be used to pay-out depositors claims.
Isechal also said that if the receiver, Kaleb Udui Jr. chooses to, he can even pay 100 percent other depositors for humanitarian reasons like churches, schools and states, without going through statutory interpretation.
Isecheal based his explanations on Section 67 of FIA or RPPL 6-3 (priorities in payment of claims) and according to the legal opinion of the Asst. legal counsel of the House of Delegates (HOD) Emily Boothroyd.
Isechal earlier asked the opinion of Boothroyd on matters of "whether that particular section of the FIA mandates that monies derived from outside loans and not the sale of bank assets, must e used as enumerated within that section, or whether the section only applies to monies derived from the sale of bank assets.
Isechal also wanted if that particular section of the law directs the receiver to use the monies from outside sources such as loans as directed.
First, can FIA sec. 67 be amended to reflect more permissive use of outside funds, beyond the scope currently dictated and second, whether the OEK can amend Sec. 67 only to cater specifically to this instance.
Boothroyd wrote that when looking to the language of a stature or regulation rpomulgated by the OEK, as in this instace, or an administrative agency, courts have typically employed the "plain meaning rule," which essentially states that where s stature or regulation is clear and unambiguous, no further interpretation is necessary.
In quoting section 67, Boothroyd wrote that in any liquidation of a bank’s assets, allowed secured claims shall be paid to the extent of the realization of the security, or the security shall be delivered to the secured creditor, and from the proceeds other allowed claims hall be paid in priority to all other debts, in the order of the claims.
She stressed that "since this section clearly states that the hierarchy dictated pertains to monies derived from the liquidation of assets, it appears to be clear on its face, leaving no room for statutory interpretation."
Boothroyd further explained that where the OEK limited the section to "liquidation of bank assets" and such proceeds further inquiry and interpretation of such section is unnecessary.
She said that the Act refers to the ability of the receiver to secure loans (both secured and unsecured) on the bank’s assets and to operate the bank in general, excepting from the list of powers only the ability to extend new credit or taking new deposits.
She said that if the OEK wished to include Sec. 67 of the FIA the money from such loans or grants, it could have.
She also said that based on the rules of construction stated by a court decision it is not necessary to interpret such silence.
Boothroyd said that it might be argued that a loan secured by the assets of the bank might constitute a part of the liquidation process and therefore the money received would be proceeds.
However, she said that the term proceeds typically accompanies a sale and not a loan agreement, especially in a receivership context.
She said that the section pertains only to the proceeds of the liquidation of bank assets and not the money received from outside grants or loans during the receivership.