Section 4--214. Insolvency and Preference.

(1) Any item in or coming into the possession of a payor or collecting
bank which suspends payment and which item is not finally paid shall be
returned by the receiver, trustee or agent in charge of the closed bank
to the presenting bank or the closed bank's customer.

(2) If a payor bank finally pays an item and suspends payments without
making a settlement for the item with its customer or the presenting
bank which settlement is or becomes final, the owner of the item has a
preferred claim against the payor bank.

(3) If a payor bank gives or a collecting bank gives or receives a
provisional settlement for an item and thereafter suspends payments, the
suspension does not prevent or interfere with the settlement becoming
final if such finality occurs automatically upon the lapse of certain
time or the happening of certain events (subsection (3) of Section
4--211, subsections (1) (d), (2) and (3) of Section 4--213).

(4) If a collecting bank receives from subsequent parties settlement
for an item which settlement is or becomes final and suspends payments
without making a settlement for the item with its customer which is or
becomes final, the owner of the item has a preferred claim against such
collecting bank.