Settlement of Default
(1)In the event of default, the purchaser shall have the following options for settlement of the contract:
(A)A purchaser may settle a default by the completion date of the contract. Such settlement shall include payment of the balances owing the state plus any other damages and expense incurred by the state as a result of the default;
(B)Damages and expense shall include, but not be limited to, any calculated costs and losses resulting from the resale of the parcel and any rehabilitation or regeneration delay costs and losses in areas which have been harvested;
(C)Any delays in this payment after the termination date of the contract shall be subject to an interest charge.
(A)Cash Resale. The original purchaser shall be responsible for any monies due the state if the balance of payments owing and other damages and expense incurred as a result of the default are not offset by the values of the resale on a cash basis. Such balances shall be due 30 days after the resale and award of the contract. Any delays in payment after the due date shall be subject to an interest charge;
(B)Recovery Resale. The original purchaser shall be responsible for any monies due the state if the balance of payments owing and other damages and expense incurred in the original sale are not offset by the values in the new sale on a recovery basis. The original purchaser shall have the option of settling with the state based upon the resale bid and the state’s estimate of volume and value to be recovered. If this option is not exercised within 30 days of the award of the resale, then an interest charge on any monies owing shall accrue from the date the resale is awarded until the settlement is made;
(C)Without Resale. In the event a defaulted parcel is not resaleable, the difference between the appraised price of the parcel and the original bid price plus any damages and expense and interest due shall become the basis for a negotiated settlement between the purchaser and the state Forester.
(c)Default because of the purchaser’s injury to or severance of timber not included in the sale:
(A)The Forester may take one or more of the following actions:
(i)Terminate the contract;
(ii)Assess damages and expenses in the amount of:
(I)Treble the market value of the severed or injured timber if the purchaser’s action is willful or intentional or;
(II)Double the market value of the severed or injured timber if the purchaser’s action is not willful or intentional.
(B)Any damages assessed for injury or severance are in addition to and not in lieu of any other damages to which the Forester may be entitled under section (1) of this rule.
(2)In either option, the following shall apply:
(a)The interest rates used shall be those in effect being earned by the excess fund in the state Treasurer’s office at the time interest commences to run;
(b)In the case of a required project which was completed by the purchaser for the defaulted contract, the purchaser is entitled to credit for the project in the amount of the appraised value of the project as shown in the appraisal filed in the Forester’s office minus any compensation the purchaser has received for the project during the course of the contract;
(c)Initial down payments may be retained by the state and surety bonds shall be maintained in effect until the State has been reimbursed for all damages and expense incurred as a result of the default.
Rule 141-015-0050 — Settlement of Default,