Discharge of surety or letter of credit issuer on application of surety or issuer
The surety or the representatives of any surety upon the bond of any trustee, committee, guardian, assignee, receiver, executor, administrator or other fiduciary, and any irrevocable letter of credit issuer for any trustee, committee, guardian, assignee, receiver, executor, administrator or other fiduciary is entitled as a matter of right to be discharged from liability as provided in this section, and to that end may, on notice to the principal named in the bond or irrevocable letter of credit, apply to the court that accepted the bond or irrevocable letter of credit or to the court of which the judge who accepted the bond or irrevocable letter of credit was a member or to any judge thereof, praying to be relieved from liability for the act or omission of the principal occurring after the date of the order relieving such person, and that the principal be required to account and give new sureties or cause to be issued new letters of credit. Notice of the application shall be served on the principal personally not less than five days prior to the date on which the application is to be made, unless it satisfactorily appears to the court or judge that personal service cannot be had with due diligence within the state, in which case notice may be given by personal service without the state or in such manner as the court or judge directs. Pending the hearing of the application the court or judge may restrain the principal from acting except to preserve the trust estate until further order. If upon the return of the application the principal fails to file a new bond or irrevocable letter of credit to the satisfaction of the court or judge, the court or judge must make an order requiring the principal to file a new bond or irrevocable letter of credit within a period not exceeding five days. If the new bond or irrevocable letter of credit is filed upon the return of the application, or within the time fixed by the order, the court or judge must make a judgment or order requiring the principal to account for all acts and proceedings to and including the date of the judgment or order, and to file such account within a time fixed, not exceeding 20 days, and discharge the surety or letter of credit issuer making application from liability for any act or default of the principal subsequent to the date of the judgment or order. If the principal fails to file a new bond or irrevocable letter of credit within the time specified, a judgment or order must be made revoking the appointment of the principal or removing and requiring the principal to file an account within not more than 20 days. If the principal fails to file the account, the surety or letter of credit issuer may make and file an account with like force and effect as though filed by the principal, and upon settlement thereof and upon the trust fund or estate being found or made good and paid over or properly secured, credit shall be given for all commissions, costs, disbursements and allowances to which the principal would be entitled were the principal accounting, and allowance shall be made to the surety or letter of credit issuer for the expense incurred in filing the account and procuring the settlement thereof. After the filing of the account, either by the principal or the surety or the letter of credit issuer, the court or judge must, upon the petition of the principal or surety or the letter of credit issuer, issue an order requiring all persons interested in the estate or trust to attend a settlement of the account at a time and place therein specified, and upon the trust fund or estate being found or made good and paid over or properly secured, the surety or the letter of credit issuer shall be discharged from all liability. Upon demand in writing by the principal, the surety or the letter of credit issuer shall return any compensation that has been paid for the unexpired period of the bond or the letter of credit. [Amended by 1991 c.331 §11; 2003 c.576 §310]
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