KRS 286.3-874: Rights of receiver under participation agreements.

The granting of a participation in a loan or other asset shall, unless otherwise expressly so

stated in the participation agreement or certificate, constitute a sale and assignment of,

and transfer of ownership in, a proportionate interest in the loan or o ther asset and in all

security interests, guaranties, and other rights granted under the loan agreement, the note,

and all documents of any nature related to the loan or other asset, whether such

documents are contemporaneously or thereafter executed. The perfection of a security

interest in personal property or the filing of a lien on real property by the selling bank

shall be deemed perfection or filing on behalf of each participant, whether or not such

participant shall be a participant at the time of such perfection or filing. Upon the closing

of a bank under KRS 286.3 -854, the receivership estate shall have no interest in such

proportionate interests in the loan or other asset, or in any security therefor or any rights

therein, therefore, sold a parti cipant, such rights passing, to the extent such rights have

not previously passed to the participant without further action on the part of the selling

bank or participant. The receiver shall have no greater rights under any participation

agreement than did the closed bank immediately prior to its closing.