7 U.S.C. § 2005 — Payment of losses on guaranteed loans

(a) Payments to lenders (1) Requirement Within 3 months after a court of competent jurisdiction confirms a plan of reorganization under chapter 12 of title 11, for any borrower to whom a lender has made a loan guaranteed under this chapter, the Secretary must pay the lender an amount estimated by the Secretary to be equal to the loss incurred by the lender for the guarantee. (2) Payment toward loan guarantee Any amount paid to a lender under this subsection about a loan guaranteed under this chapter must be treated as payment towards satisfaction of the loan guarantee. (b) Administration (1) Loss by lender If the lender of a guaranteed farmer program loan^* takes any action described in section 1981(b)(4) of this title about the loan and the Secretary approves that action, then, for the guarantee, the lender must be treated as having sustained a loss equal to the amount by which— (A) the outstanding balance of the loan immediately before that action, exceeds (B) the outstanding balance of the loan immediately after that action. (2) Net present value of loan The Secretary must approve the taking of an action described in section 1981(b)(4) of this title by the lender of a guaranteed farmer^* program loan about the loan if that action reduces the net present value of the loan to an amount equal to at least the greater of— (A) the greatest net present value of a loan the borrower could reasonably be expected to repay; and (B) the greatest amount that the lender of the loan could reasonably expect to recover from the borrower through bankruptcy, or liquidation of the property securing the loan, less all reasonable and necessary costs and expenses that the lender of the loan could reasonably expect to incur to preserve or dispose of that property (including all associated legal and property management costs) in the course of such a bankruptcy or liquidation. (3) Construction of subsection This subsection must not be construed to limit the authority of the Secretary to enter into a shared appreciation arrangement with a borrower, or the terms and conditions which must be required of a borrower, under section 2001(e) of this title .