1. The value of security held by a secured creditor shall be determined in one of the following ways, as the court may direct:
a. By converting the security into money according to the terms of the agreement pursuant to which the security was delivered to the creditors.
b. By agreement, arbitration, compromise or litigation between the creditor and the liquidator.
2. The determination shall be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount so determined shall be credited upon the secured claim. A deficiency shall be treated as an unsecured claim. If the claimant surrenders the security to the liquidator, the entire claim shall be allowed as if unsecured.
84 Acts, ch 1175, §41