Section 1793.9 Of Article 7. Offenses And Penalties From California Health And Safety Code >> Division 2. >> Chapter 10. >> Article 7.
1793.9
. (a) In the event of receivership or liquidation, all claims
made against a provider based on the provider's continuing care
contracts shall be preferred claims against all assets owned by the
provider. However, these preferred claims shall be subject to any
perfected claims secured by the provider's assets.
(b) If the provider is liquidated, residents who have executed a
refundable continuing care contract shall have a preferred claim to
liquid assets held in the refund reserve pursuant to Section 1792.6.
This preferred claim shall be superior to all other claims from
residents without refundable contracts or other creditors. If this
fund and any other available assets are not sufficient to fulfill the
refund obligations, each resident shall be distributed a
proportionate amount of the refund reserve funds determined by
dividing the amount of each resident's refund due by the total
refunds due and multiplying that percentage by the total funds
available.
(c) For purposes of computing the reserve required pursuant to
Sections 1792.2 and 1793, the liens required under Section 1793.15
are not required to be deducted from the value of real or personal
property.