Legislation
SECTION 575
Bond required
General Business (GBS) CHAPTER 20, ARTICLE 29-E
§ 575. Bond required. 1. At the time of filing each registration
statement, the trading stamp company must also file with the secretary
of state a bond payable to the people of the state of New York and duly
executed by the company and a corporate surety qualified to do business
in this state; such bond shall be conditioned upon the performance by
the trading stamp company of its obligation to redeem trading stamps
issued by retailers in this state when they are duly presented for
redemption by the rightful holders.
2. The principal sum of the bond required by this article shall be as
follows: if the company has not previously done business as a trading
stamp company in this state, or if the company's gross receipts from
such business during its last fiscal year was not in excess of one
hundred thousand dollars the principal sum shall be ten thousand
dollars; for each additional one hundred thousand dollars, or fraction
thereof, of gross receipts from such business in this state, an
additional ten thousand dollars, but such bond shall not exceed one
hundred fifty thousand dollars.
3. On the effective date of each new bond, any and all liability on
all bonds previously filed under this article shall terminate, and all
rightful holders of trading stamps who prosecute their claims under this
article shall prosecute such claims solely against the new bond and only
by filing proofs of claim with the secretary of state in the manner
provided in this article.
4. In lieu of the bond required by this section, the trading stamp
company may post with the secretary of state (a) money equal to the
amount of the bond otherwise required or (b) securities equal to one
hundred twenty percent of the bond otherwise required. Such securities
shall be of the same kinds and classes as those in which the comptroller
may invest the funds of the state pursuant to section ninety-eight of
the state finance law, or in which a fiduciary may invest funds he holds
for investment pursuant to subparagraphs A through I of subparagraph (1)
of paragraph (a) of section 11-2.2 of the Estates, Powers and Trusts
Law.
statement, the trading stamp company must also file with the secretary
of state a bond payable to the people of the state of New York and duly
executed by the company and a corporate surety qualified to do business
in this state; such bond shall be conditioned upon the performance by
the trading stamp company of its obligation to redeem trading stamps
issued by retailers in this state when they are duly presented for
redemption by the rightful holders.
2. The principal sum of the bond required by this article shall be as
follows: if the company has not previously done business as a trading
stamp company in this state, or if the company's gross receipts from
such business during its last fiscal year was not in excess of one
hundred thousand dollars the principal sum shall be ten thousand
dollars; for each additional one hundred thousand dollars, or fraction
thereof, of gross receipts from such business in this state, an
additional ten thousand dollars, but such bond shall not exceed one
hundred fifty thousand dollars.
3. On the effective date of each new bond, any and all liability on
all bonds previously filed under this article shall terminate, and all
rightful holders of trading stamps who prosecute their claims under this
article shall prosecute such claims solely against the new bond and only
by filing proofs of claim with the secretary of state in the manner
provided in this article.
4. In lieu of the bond required by this section, the trading stamp
company may post with the secretary of state (a) money equal to the
amount of the bond otherwise required or (b) securities equal to one
hundred twenty percent of the bond otherwise required. Such securities
shall be of the same kinds and classes as those in which the comptroller
may invest the funds of the state pursuant to section ninety-eight of
the state finance law, or in which a fiduciary may invest funds he holds
for investment pursuant to subparagraphs A through I of subparagraph (1)
of paragraph (a) of section 11-2.2 of the Estates, Powers and Trusts
Law.