N.Y. General Business Law § 576: Claims by rightful holders of trading stamps

§ 576. Claims by rightful holders of trading stamps. 1. If a trading

stamp company defaults in the redemption of its stamps when they are

duly presented for redemption by residents of this state who are the

rightful holders of such stamps, all such holders of such trading

stamps, including retailers in possession of such stamps for issuance to

customers, shall be entitled to make claim against such bond. Any such

rightful holder of trading stamps may, after such default, file a

complaint with the secretary of state, who shall forthwith make a

determination whether there has been a default. If said secretary

determines that there has been a default, he shall give notice of such

determination to the company and, if such default is not corrected

within ten days, he shall publish notice of such default in three

consecutive publications of one or more newspapers having general

circulation throughout this state and therein require that proof of all

claims for redemption of the trading stamps of such company be filed

with him, together with the trading stamps upon which the claim is

based, within six months after the date of the first such publication.

The secretary of state shall acknowledge receipt of all trading stamps

submitted with such claims and determine the validity of all claims so

filed promptly after the expiration of such period. Thereupon the

secretary shall be paid by the surety such amount, not exceeding the

principal sum of the bond, as shall be necessary to satisfy all valid

claims so filed. The secretary shall promptly thereafter make an

equitable distribution of the proceeds of the bond to such claimants and

shall destroy the trading stamps so surrendered.

2. The assertion of a claim by holders of trading stamps against the

bond of a defaulting trading stamp company pursuant to this section

shall not affect or impair any other rights or remedies such holders may

have against such company under any other statute or at common law. In

the pursuit of any such right or remedy, the receipt issued by the

secretary of state for trading stamps received in connection with such

claims asserted pursuant to this section shall be evidence that persons

having such receipts were holders of such stamps prior to their

surrender to the secretary.

3. The costs and other charges incurred by the secretary of state in

performing the duties set forth in this section shall constitute a

proper charge against the trading stamp company which has defaulted, or,

in the event of the trading stamp company's failure to pay, against the

bond filed by that company, and shall constitute a prior claim against

such company or such bond, except that in no event shall the surety be

liable for such charge and all other valid claims as an aggregate in

excess of the principal sum of the bond.