KRS 355.7-601: Lost, stolen, or destroyed documents of title.

(1) If a document of title is lost, stolen, or destroyed, a court may order delivery of the

goods or issuance of a substitute document and the bailee may without liability to

any person comply with the order. If the document was negotiable, a court shall not

order delivery of the goods or issuance of a substitute document without the

claimant's posting security unless it finds that any person that may suffer loss as a

result of nonsurrender of possession or control of the document is adequately

protected against the loss. If the document was nonnegotiable, the court may require

security. The court may also order payment of the bailee's reasonable costs and

attorney's fees in any action under this subsection.

(2) A bailee that without court order delivers goods t o a person claiming under a

missing negotiable document of title is liable to any person injured thereby. If the

delivery is not in good faith, the bailee is liable for conversion. Delivery in good

faith is not conversion if the claimant posts security wit h the bailee in an amount at

least double the value of the goods at the time of posting to indemnify any person

injured by the delivery which files a notice of claim within one (1) year after the

delivery.