102 STAT. 4746
PUBLIC LAW 100-710—NOV. 23, 1988 possession or under the control of a person claiming a possessory common law lien.
"§31326. Court sales to enforce preferred mortgage liens and maritime liens and priority of claims "(a) When a vessel is sold by order of a district court in a civil action in rem brou^t to enforce a preferred mortgage lien or a maritime lien, any claim in the vessel existing on the date of sale is terminated, including a possessory common law lien of which a person is deprived under section 31325(e)(2) of this title, and the vessel is sold free of all those claims. "(b) Each of the claims terminated under subsection (a) of this section attaches, in the same amount and in accordance with their priorities to the proceeds of the sale, except that— "(1) the preferred mortgage lien has priority over all claims against the vessel (except for expenses and fees allowed by the court, costs imposed by the court, and preferred maritime hens); and "(2) for a foreign vessel, the preferred mortgage lien is subordinate to a maritime lien for necessaries provided in the United States. "§ 31327. Forfeiture of mortgagee interest
- The interest of a mortgagee in a documented vessel or a vessel
covered by a preferred mortgage under section 31322(d) of this title may be terminated by a forfeiture of the vessel for a violation of a law of the United States only if the mortgagee authorized, consented, or conspired to do the act, failure, or omission that is the basis of the violation.
- § 31328. Limitations on parties serving as trustees of mortgaged
vessel interests "(a) Without the approval of the Secretary of Transportation, an instrument or evidence of indebtedness secured by a mortgage of a documented vessel to a trustee may not be issued, assigned, or transferred to, or held in trust for, a person not qualifying as a citizen of the United States under section 2 of the Shipping Act, 1916 (46 App. U.S.C. 802), unless the trustee— "(1) is a State; "(2) is the United States (government; "(3) is a person approved by the Secretary and qualifying as a citizen of the United States under that section 2; or "(4) has been approved by the Secretary. "(b) The Secretary shall approve a trustee under subsection (a)(3) or (4) of this section if the trustee— "(1) is organized as a corporation, and is doing business, under the laws of the United States or of a State; "(2) is authorized under those laws to exercise corporate trust powers; "(3) is subject to supervision or examination by an official of the United States Government or a State; "(4) has a combined capital and surplus (as stated in its most recent published report of condition) of at least $3,000,000; and "(5) if the trustee is to be approved under subsection (a)(4) of this ^tetion, meets any other requirements prescribed by the Secretary.