Section 1011.15. Death or incapacitation of a certificate holder or certain persons with controlling interest

(a) Definitions. The following word, when used in this section, has the following meanings, unless the context indicates otherwise:

Incapacitation—A determination by a court that an individual is incapacitated as provided in 20 Pa.C.S. § 5511 (relating to petition and hearing; independent evaluation) or, for non-Pennsylvania residents, a substantially similar order from a court of competent jurisdiction.

(b) Death or incapacitation of an individual certificate holder.

(1) Upon the death or incapacitation of an individual certificate holder, the rights conferred by the certificate shall continue with the legal representative of the deceased or incapacitated certificate holder for 6 months.

(2) The legal representative of the deceased or incapacitated certificate holder shall immediately begin the process of finding a qualified person to buy the certificate as provided in Chapter 1027 (relating to sale of rights), including the use of a broker or attorney. Nothing in this section prohibits the legal representative from buying the certificate.

(3) In the event an SA-1 for the certificate is not correctly filed, as provided in § 1027.6 (relating to application for sale of transferable rights), within 90 days of the date the certificate holder died or was declared incapacitated, the certificate will be placed out of service as provided in § 1003.32 (relating to out of service designation) and may be cancelled upon determination of a formal complaint filed by the Enforcement Department or trial counsel.

(4) In the event an SA-1 for the certificate is correctly filed within 90 days of the date the certificate holder died or was declared incapacitated, the rights conferred by the certificate shall continue with the legal representative of the deceased or incapacitated certificate holder for the duration of the SA-1 review period and through closing on the sale.

(c) Death, incapacitation or dissolution of certain persons with controlling interest in a certificate.

(1) Upon the death, incapacitation or dissolution of a person that owns 5% or more of the certificate holder’s securities, the rights conferred by the certificate shall continue with the certificate holder for 3 months.

(2) The certificate holder shall immediately begin the process of finding a qualified person to buy the securities of the certificate holder referenced in paragraph (1) as provided in Chapter 1027, including the use of a broker or attorney. Nothing in this section will prohibit the certificate holder from acquiring the securities of the person referenced in paragraph (1).

(3) In the event an SA-1 for the sale of the securities referenced in paragraph (1) is not correctly filed as provided in § 1027.5 (relating to agreement of sale) within 6 months of the date of the person’s death, incapacitation or dissolution, the certificate will be placed out of service as provided in § 1003.32 and may be cancelled upon determination of a formal complaint filed by the Enforcement Department or trial counsel.

(4) In the event an SA-1 for the sale of the securities referenced in paragraph (1) is correctly filed, as provided in § 1027.6, within 6 months of the date of the person’s death, incapacitation or dissolution, the rights conferred by the certificate shall continue for the duration of the SA-1 review period and through closing on the sale.

(d) Ineligibility of successor or legal representative. This section may not be interpreted to permit the operation or use of Authority rights by a person otherwise prohibited from the ability to receive Authority rights. For example, the executor of the estate on a deceased individual certificate holder who would be ineligible to possess Authority rights as provided in § 1011.5 (relating to ineligibility due to conviction or arrest) may not operate or supervise the operation of the rights conferred by the certificate.

Notation

Cross References

This section cited in 52 Pa. Code § 1011.16 (relating to limitations); and 52 Pa. Code § 1051.16 (relating to limitations).