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