§ 22.81 - Termination of rights and liability under a bond.

(a) If the notice of termination given by the surety is not withdrawn in writing, the rights of the principal as supported by the bond terminate on the date named in the notice. The surety is relieved from liability under a bond as to any operations which are wholly subsequent to—

(1) The date named in a notice of termination (§ 22.80); or

(2) The effective date of a superseding bond (§ 22.79); or

(3) The date of approval of the discontinuance of operations by the principal.

(b) If the principal fails to file a valid superseding bond before the date on which the surety desires to be relieved from liability under the bond, the surety, notwithstanding the release from liability as specified in paragraph (a)(1) of this section, shall remain liable under the bond for all tax-free alcohol and recovered alcohol on hand or in transit to the principal on that date until the spirits have been lawfully disposed of or a new bond has been filed by the principal.