(1) The value of any security held by a secured creditor must 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; or
(b) by agreement, arbitration, compromise, or litigation between the creditor and the liquidator.
(2) The determination must be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount determined must be credited upon the secured claim, and any deficiency must be treated as an unsecured claim. If the claimant surrenders the claimant's security to the liquidator, the entire claim must be allowed as if unsecured.