Illinois Statutes Chapter 70. Special Districts § 605/9-7. Indebtedness of Merged Districts

§ 9-7. Indebtedness of Merged Districts. In case any district merged into a consolidated district has bonds or notes outstanding which are a lien on funds on hand in the treasury of the district at the time of consolidation, or on assessments which are unpaid at the time of consolidation, such lien shall be unimpaired by such consolidation and the lien shall continue in favor of the bond or note holders. The funds on hand and the assessments when collected shall be set apart and held for the purpose of retiring such secured debt and no such funds or assessments shall be transferred into the general funds of the consolidated district until all indebtedness of the merged district has been discharged.

In case any district merged into a consolidated district has unsecured debts outstanding at the time of consolidation, any funds in the treasury of such district or otherwise available and not committed shall, to the extent necessary, be applied to the payment of such debts. If the funds on hand or otherwise available are not sufficient to satisfy such indebtedness, the court may, if such an assessment would otherwise be authorized, direct the commissioners of the consolidated district to levy an assessment against the lands in the merged debtor district for the purpose of paying such indebtedness. The proceeds of such assessment shall be used to pay the costs and expenses incident to the levy and collection of the assessment and for the payment of such indebtedness, and for no other purpose.