(810 ILCS 5/4-216)
(from Ch. 26, par. 4-216)
Insolvency and preference.
(a) If an item is in or comes into the possession of a payor or collecting
bank that suspends payment and the item has not been finally paid, the item
must be returned by the receiver, trustee, or agent in charge of the closed
bank to the presenting bank or the closed bank's customer.
(b) 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.
(c) 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's becoming final
if the finality occurs automatically upon the lapse of certain time or the
happening of certain events.
(d) If a collecting bank receives from subsequent parties settlement for
an item, which settlement is or becomes final and the bank suspends
payments without making a settlement for the item with its customer which
settlement is or becomes final, the owner of the item has a preferred claim
against the collecting bank.
(Source: P.A. 87-582; 87-1135.)