P.R. Laws tit. 26, § 4038
(1) The value of any security held by a secured creditor shall be determined in one of the following ways, as the court may direct:
(a) By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to such creditors, or
(b) by agreement, arbitration, settlement or litigation between the creditor and liquidator.
(2) The determination shall be made under the supervision and control of the court with due regard for the recommendations of the liquidator. The amount so determined shall be credited upon the secured claim and any deficiency shall be treated as an unsecured claim. Were the claimant to surrender his security to the liquidator the entire claim shall be deemed as unsecured.
(3)
(a) A surety has paid any losses and adjustment expenses under a surety bond contract before any petition for liquidation and the principal posts collaterals to the surety that have not been used to reimburse said losses and adjustment expenses and at the time of the petition said collaterals have not been credited against the payments made, the liquidator shall have first priority over any other person to use collateral to reimburse losses and adjustment expenses incurred by a surety before the petition for liquidation.
(b) If the principal under a surety bond or contract pledges any collateral to secure his/her obligation of reimbursing to the insurer any claim of a creditor under the surety bond or contract, such a claim shall be satisfied first out of the collateral or the collateral’s proceeds.
(c) When paying a claim to a creditor under a bond or surety contract secured by collateral, the liquidator shall retain a sufficient sum to pay for any other potential claim against the collateral.
(d) If the collateral is insufficient to pay in full all possible claims under clause (b) of this subsection, the claims shall be paid on a pro rata basis and creditors shall have a claim for any deficiency, subject to the provisions of § 4032 of this title.
(e) If the term to file a claim against a bond or surety has expired and all claims have been satisfied in full, the remaining collateral shall be returned to the principal.
[(4)] The liquidator may recover from any property securing a covered claim, the reasonable, necessary costs and expenses of preserving, or disposing of, said property, up to the total sum of the claim.
History —Ins. Code, added as § 40.380 on Aug. 17, 1991, No. 72, § 1; Dec. 14, 2007, No. 206, § 37.