Section 59: Right of disposal of collateral.

(1) Where the Corporation has in its possession or custody any collateral or security pledged by an obligor who is indebted to more than one failed insured institution, the Corporation shall have the right to dispose of such collateral or security and apply the proceeds of the sale for the repayment of any of the obligor's loan facilities other than that to which the collateral or security relates, whether or not the facility to which the collateral or security relates has been repaid:
Provided that the right of the Corporation under this section shall only accrue where the obligor fails to repay such other loan facility 21 days after a letter of demand from the Corporation.
(2) Notwithstanding the provisions of this Act or any other enactment, where the Court determines that the disposal under subsection (1) was in error or done in bad faith, no restorative, prohibitive or like order shall be granted against the Corporation in respect of the disposal of such collateral or security by the Corporation, and the remedy of any claimant or applicant against the Corporation in such an action, suit or proceedings shall be limited to damages not exceeding the value of the collateral.
(3) The rights of the Corporation under subsection (1) and (2) shall be subject to the right of secured creditors with a security interest in the asset or property which ranks equally or in priority to that held by the Corporation.