Pennsylvania Statutes Title 71 P.S. State Government § 733-711. Sale of assets repledged by institution; repledge after possession

A. Where assets belonging to others, shall be pledged or given as collateral by an institution of which the secretary subsequently takes possession as receiver, and the pledgee has actual knowledge at the time of the pledge that the assets are not assets of the institution, such pledgee shall not forfeit or sell any such collateral or pledged assets, after the secretary has taken possession, without the written permission of the secretary, any provision in any collateral note or agreement to the contrary notwithstanding; but if the secretary refuses such permission, the pledgee may, after notice to the secretary, petition the court for leave to sell such assets. The court may, after giving the pledgee and the secretary an opportunity to be heard, grant such leave, or it may make such other order as it deems to be in the best interests of all parties concerned.

However, if the assets so pledged by any such institution are accompanied by the obligation of the corporation or person owning them, the pledgee shall have the power to exercise all the rights, powers, and privileges contained in such obligation held by such pledgee, including the sale of the assets.

B. Where assets belonging to an institution of which the secretary has taken possession as receiver have been pledged or given as collateral by such institution, or where assets belonging to others shall have been pledged or given as collateral by an institution of which the secretary subsequently takes possession as receiver, and the pledgee does not have actual knowledge at the time of the pledge that such assets are not assets of the institution, such pledgee may forfeit or sell any such collateral or pledged assets, after the secretary has taken possession, in accordance with the right of such pledgee under the agreement under which such assets or collateral were pledged.

C. The secretary shall not repledge any assets held by an institution of which he is in possession, in pledge or as collateral, but belonging to other corporations or persons, unless such repledge is accompanied by the obligation of the original borrower from the institution and is for an amount not exceeding the amount of the original obligation due at the time the collateral is repledged.