New York Banking Law
ARTICLE XIII
MERGER; VOLUNTARY DISSOLUTION;
SUPERINTENDENT`S TAKING POSSESSION;
REORGANIZATION; LIQUIDATION
Section 600. Merger; when authorized.
601. Merger agreement; authorization; approval; filing.
601-a. Purchase of assets.
601-b. Approval or disapproval of merger or purchase of assets.
601-c. Sale, lease, exchange or other disposition of property,
rights, privileges and franchises.
602. Effect of merger.
603. Issuance of new certificates of stock or other
consideration.
604. Rights of dissenting stockholders.
604-a. Transfer of fiduciary relationships of a banking
institution.
605. Voluntary liquidation; sale of assets; forfeiture of
charter by non-user.
605-a. Transfer of deposit liabilities of bank or trust company;
sale or pledge of assets to facilitate such transfer.
606. When superintendent may take possession of banking
organization; when possession may be surrendered.
607. Manner and time within which taking possession may be
tested.
609. Resumption of business by bank, trust company or
industrial bank; retirement of certificates;
applicability to stock-form savings banks and
stock-form savings and loan associations.
610. Resumption of business in accordance with plan of
reorganization.
611. Special deputies; assistants; counsel and other
employees.
611-a. Appointment of single judge.
612. Certificates to be recorded and received in evidence.
612-a. Payment of wages.
613. Payment by superintendent of expenses of liquidation.
614. Obtaining possession of pleadings, et cetera, in actions
against which attorneys` liens are asserted.
615. On taking possession, superintendent shall notify those
holding assets; effect of notification; turnover of
assets and payment of debts owed to the banking
organization.
616. Inventory of assets; where filed.
617. Disposition of property held as bailee, or depositary;
opening of safe deposit boxes; disposal of contents.
618. Liquidation and conservation of assets; compromising
debts and claims; deposit of moneys collected;
preference; superintendent, as liquidator, authorized
to borrow on and pledge assets of banks.
618-a. Repudiation of contracts.
619. Prosecution and defense of actions; actions preferred;
limitations; power to execute instruments; exemption
from filing and other fees.
620. Notice to creditors to make proof of claims; form of
claims; claims for priority of payment.
620-a. Certain claims shall not be accepted.
622. List of claims duly presented; filing.
623. Filing objections to claims presented or listed;
procedure upon claim under objection.
624. Acceptance and rejection of claims and accounts; filing
of list thereof; secured claims and accounts;
determination of priorities.
625. Effect of accepting claims and accounts; limitation upon
actions to establish claims and accounts; necessary
allegations; effect of judgment.
626. Judgments recovered shall not be liens.
627. Dividends to creditors; distributions to stockholders;
dissolution; destruction of documents.
628. Payment of dividends when deposits have been made
available by Federal Deposit Insurance Corporation.
629. Payment of dividends to minors, trustees or joint
depositors; payment of dividends where adverse claim is
asserted; interpleader in certain actions.
630. Claims of shareholders and members of credit unions and
savings and loan associations.
631. Actions against directors, trustees, managers or officers
for violation of their official duties.
633. Service of notice or process during time of war.
634. Power to appoint regulator or insurer as receiver;
additional powers.
S 600. Merger; when authorized. The following mergers are hereby
authorized:
(1) One or more corporations organized under the laws of this state
and subject to the provisions of article three, article eight, article
eleven or article twelve of this chapter with another corporation
subject to the provisions of the same article.
(2) One or more mutual savings banks with another mutual savings bank.
(3) One or more mutual savings and loan associations with another
mutual savings and loan association.
(4) One or more mutual savings and loan associations with one or more
mutual savings banks.
(5) One or more safe deposit companies with a bank or trust company.
(6) One or more banks, trust companies, stock-form savings banks or
stock-form savings and loan associations, with one or more out-of-state
banks as such term is defined in subdivision one of section two hundred
twenty-two of this chapter.
(7) Such other mergers between and among banking institutions as the
banking board may authorize.
S 601. Merger agreement; authorization; approval; filing. 1. A
written plan of merger shall be submitted, in duplicate, to the
superintendent by the corporations which are to merge. Such plan shall
be in form satisfactory to the superintendent, shall specify each
corporation to be merged and the corporation which is to receive into
itself the merging corporation or corporations, and shall prescribe the
terms and conditions of the merger and the mode of carrying it into
effect. Such plan may provide the name to be borne by the receiving
corporation and such name may be the name of any corporation which is a
party to such plan or a new name. Such plan may also name the persons
who shall constitute the board of directors or trustees of the receiving
corporation after the merger shall have been accomplished, provided that
the number and qualifications of such persons shall be in accordance
with the provisions of this chapter relating to the number and
qualifications of directors or trustees of such a corporation; or, in
the case of stock corporations, such plan may provide for a meeting of
the stockholders to elect a board of directors within sixty days after
such merger, and may make provision for conducting the affairs of the
corporation meanwhile. In the case of savings banks, such plan may also
provide that the place or places of business of the merging bank may be
maintained as an office or offices of the receiving bank as provided in
paragraph (c) of subdivision two of section two hundred forty of this
chapter.
At the time of submission for action by the superintendent of the
written plan of merger, an investigation fee of three thousand dollars
shall be paid to the superintendent, except by corporations subject to
article eleven of this chapter; provided, however, that no investigation
fee shall be payable under this subdivision with respect to a merger to
which subdivision two of section six hundred one-b of this chapter is
applicable.
2. In the case of stock corporations, there shall be submitted, in
duplicate, to the superintendent with the plan of merger, a certificate
of the president, secretary or cashier of each of the corporations which
are to merge, certifying that such plan has been approved by the board
of directors of his corporation by a majority vote of all the members
thereof, and that such plan was thereafter submitted to the stockholders
of such corporation at a meeting thereof held upon notice of at least
fifteen days, specifying the time, place and object of such meeting and
addressed to each stockholder at the address appearing upon the books of
the corporation and published at least once a week for two successive
weeks in one newspaper in each county in which any of the merging
corporations has its principal place of business and that such plan has
been approved at such meeting by the vote of the stockholders owning at
least two-thirds in amount of the stock of such corporation, except that
such certificate of the president, secretary or cashier of the receiving
corporation need not certify that such plan was submitted to or approved
by vote of the stockholders of such corporation if (a) the total assets
of the merging corporation or corporations do not exceed ten per centum
of the total assets of the receiving corporation and (b) the plan of
merger does not change the name or the authorized shares of capital
stock of the receiving corporation or make or require any other change
or amendment for which the approval or consent of stockholders of the
receiving corporation would be required under provisions of law other
than this section.
3. In the case of mutual savings banks, mutual savings and loan
associations or credit unions, there shall be submitted, in duplicate,
to the superintendent with the plan of merger, a certificate of the
president, secretary or cashier of each of the corporations which are to
merge, certifying that such plan has been submitted to a special meeting
of the board of trustees or directors of his corporation, that a notice
of at least fifteen days, specifying the time, place and object of the
meeting, together with a copy of the plan has been mailed to each
trustee or director and that such plan has been approved at such meeting
by a vote of two-thirds of all the members of such board of trustees or
directors.
4. In the case of merger of a safe deposit company into a bank or
trust company which owns at least ninety-five per centum of the
outstanding shares of each class of the stock of such safe deposit
company, in lieu of compliance with subdivisions one and two of this
section there may be submitted, in duplicate, to the superintendent a
written plan of merger in form satisfactory to the superintendent
stating that such safe deposit company as the merging corporation is to
be merged into such bank or trust company as the receiving corporation
and setting forth any necessary or appropriate terms and conditions of
the merger and provisions for carrying it into effect, including, if the
receiving corporation does not own all the outstanding stock of the
merging corporation, provisions with respect to the cash or other
consideration to be paid or delivered to the stockholders of the merging
corporation (other than the receiving corporation) upon the merger
becoming effective and upon the surrender of their shares. There shall
be submitted, in duplicate, to the superintendent with such plan of
merger, a certificate of the president, secretary or cashier of the
merging corporation and of the receiving corporation, certifying that
such plan has been approved by the board of directors of his corporation
by a majority vote of all the members thereof. The certificate of the
president, secretary or cashier of the merging corporation shall certify
the extent of the ownership by the receiving corporation of the
outstanding capital stock of the merging corporation. If the receiving
corporation does not own all the outstanding stock of the merging
corporation, the certificate of the president, secretary or cashier of
the merging corporation shall also certify that there has been mailed to
each of its stockholders of record (other than the receiving
corporation), at the address appearing upon the books of the merging
corporation, a copy of the plan of merger. Any holder of a share or
shares of stock of the merging corporation not owned by the receiving
corporation may, at any time prior to the expiration of twenty days
after the date of mailing of the plan of merger to the stockholders of
the merging corporation, object to the merger and demand payment for his
stock. Such objection and demand must be in writing and filed with the
receiving corporation. Thereupon such stockholder and the receiving
corporation shall have the right to have such stock appraised and paid
for as provided in section six thousand twenty-two of this chapter,
subject to the conditions and provisions of said section (other than the
conditions and provisions of subdivisions one, two and three thereof);
except that (a) the time within which the receiving corporation may mail
to such stockholder a written offer accompanied by a balance sheet and
profit and loss statement of the merging corporation as provided in
subdivision seven of said section shall expire thirty days after the
merger takes effect, (b) all references in subdivision eight of said
section to the stockholders` authorization date shall be deemed to refer
to the date of mailing of the plan of merger to the stockholders of the
merging corporation, and (c) all references in said section to the
notice of election to dissent shall be deemed to refer to the demand of
a stockholder of the merging corporation for payment of his stock.
S 601-a. Purchase of assets. 1. The following acquisitions are hereby
authorized whether by purchase or otherwise, other than by merger, of
all or a substantial part of the assets of:
(a) One or more corporations organized under the laws of this state
and subject to the provisions of article three, article eight or article
twelve of this chapter by another corporation subject to the provisions
of the same article.
(b) One or more safe deposit companies by a bank or trust company.
(c) One or more mutual savings banks by another mutual savings bank.
(d) One or more mutual savings and loan associations by another mutual
savings and loan association.
(e) One or more stock-form savings banks by another stock-form savings
bank.
(f) One or more stock-form savings and loan associations by another
stock-form savings and loan association.
(g) One or more banking institutions by another banking institution to
the extent permitted under regulations of the banking board.
2. A written plan providing for the acquisition by one corporation of
the assets of another shall be submitted, in duplicate, to the
superintendent by both corporations. Such plan shall be in form
satisfactory to the superintendent, shall specify the selling and the
acquiring corporation, and shall prescribe the terms and conditions of
the acquisition and the mode of carrying it into effect.
At the time of submission for action by the superintendent of the
written plan of acquisition of assets, an investigation fee of three
thousand dollars shall be paid to the superintendent; provided, however,
that no investigation fee shall be payable under this subdivision with
respect to an acquisition to which subdivision two of section six
hundred one-b of this chapter is applicable.
3. There shall also be submitted, in duplicate, to the superintendent
with the plan of acquisition of assets, a certificate of the president,
secretary or cashier of the selling corporation and, in the event the
assets of the selling corporation shall exceed ten per centum of the
assets of the acquiring corporation, of the acquiring corporation,
certifying that such plan has been approved by the board of directors of
his corporation by a majority vote of all the members thereof, and that
such plan was thereafter submitted to the stockholders of such
corporation at a meeting thereof held upon notice of at least fifteen
days, specifying the time, place, and object of such meeting and
addressed to each stockholder at the address appearing upon the books of
the corporation and published at least once a week for two successive
weeks in one newspaper in each county in which the selling corporation
and, if applicable, the acquiring corporation has its principal place of
business and that such plan has been approved at such meeting by the
vote of the stockholders owning at least two-thirds in amount of the
stock of such corporation.
5. Nothing contained in this section six hundred and one-a shall be
construed to prohibit any other purchase of assets which is otherwise
permitted by applicable law.
S 601-b. Approval or disapproval of merger or purchase of assets. 1.
The superintendent shall approve or disapprove of a proposed merger as
authorized by section six hundred of this chapter or a proposed
acquisition of all or a substantial part of the assets of any banking
organization as authorized by section six hundred one-a of this chapter,
as the case may be, within one hundred twenty days after the submission
of the proposed plan thereof to him. In determining whether to so
approve, the superintendent shall take into consideration (i) the
declaration of policy contained in section ten of this chapter, (ii)
whether the effect of such merger or acquisition shall be either to
expand the size or extent of the resulting or acquiring institution
beyond limits consistent with adequate and sound banking and the
preservation thereof or result in a concentration of assets beyond
limits consistent with effective competition, (iii) whether such merger
or acquisition may result in such a lessening of competition as to be
injurious to the interests of the public or tend toward monopoly and
(iv) primarily, the public interest and the needs and convenience
thereof. If the superintendent shall approve such proposed merger or
acquisition, he shall file the plan, together with such certificates and
the original of the approval of the superintendent, in the office of the
superintendent, and, in the case of merger, a duplicate of the plan,
together with a duplicate of each of such certificates and a duplicate
of the superintendent`s approval, shall be filed in the office of the
clerk of the county in which the principal office of the receiving
corporation is located. Upon such filing in the office of the
superintendent, the merger or acquisition shall become effective, unless
a later date is specified in the plan, in which event the merger or
acquisition shall become effective upon such later date.
2. Notwithstanding the provisions of subdivision one of this section,
the approval of the superintendent shall not be required with respect to
such merger or acquisition, if any of the corporations which are to
merge, or if the selling or acquiring corporation, is a banking
subsidiary of a bank holding company, and the banking board pursuant to
section one hundred forty-two of this chapter has granted its approval
for such bank holding company, or any trustee or trustees who hold
voting stock of such banking subsidiary for the benefit of the
stockholders or members of such bank holding company, to vote the stock
of such banking subsidiary in favor of the proposed merger or
acquisition. The superintendent shall file the plan of merger or
acquisition and the certificates submitted to him pursuant to section
six hundred one or section six hundred one-a of this chapter, together
with a certified copy of the resolution of the banking board granting
such approval, in the office of the superintendent, and, in the case of
a merger, a duplicate of the plan and of each of such certificates,
together with a certified copy of such resolution, shall be filed in the
office of the clerk of the county in which the receiving corporation is
located. Upon such filing in the office of the superintendent, the
merger or acquisition shall become effective, unless a later date is
specified in the plan, in which event the merger or acquisition shall
become effective upon such later date. For purposes of this
subdivision, the terms "bank holding company" and "banking subsidiary"
shall have the meanings stated in section one hundred forty-one of this
chapter.
S 601-c. Sale, lease, exchange or other disposition of property,
rights, privileges and franchises. 1. Subject to subdivision eight of
section six hundred five of this chapter, and except as otherwise
provided by law or by its organization certificate or other certificate
filed pursuant to law, a corporation organized under the laws of this
state and subject to the provisions of article three, article six,
article eight, article ten or article twelve of this chapter may
voluntarily sell, lease, exchange or otherwise dispose of its property,
rights, privileges and franchises, or any interest therein or any part
thereof; provided, however, that if such sale, lease, exchange or other
disposition is not made in the regular course of business of the
corporation and involves all or substantially all of its property,
rights, privileges and franchises, or an integral part thereof essential
to the conduct of the business of the corporation, such sale, lease,
exchange or other disposition shall be authorized only in accordance
with the following procedure:
(a) In the case of a corporation subject to the provisions of article
three, article eight, article twelve or a stock-form banking
organization subject to either article six or article ten of this
chapter, the board of directors of the corporation by a majority vote of
all the members thereof shall approve the proposed sale, lease, exchange
or other disposition and direct its submission to a vote of
stockholders.
Notice of meeting shall be given to each stockholder of record,
whether or not entitled to vote.
The stockholders shall authorize such sale, lease, exchange or other
disposition and may fix, or may authorize the board of directors to fix,
any of the terms and conditions thereof and the consideration to be
received by the corporation therefor, which may consist in whole or in
part of cash or other property, real or personal, including shares,
bonds or other securities of any other domestic or foreign corporation
or corporations, by vote at a meeting of stockholders of the holders of
two-thirds of all outstanding shares entitled to vote thereon.
(b) In the case of a mutual corporation subject to the provisions of
article six of this chapter, the board of trustees of the corporation by
a vote of a majority of all the members thereof shall approve and
authorize the proposed sale, lease, exchange or other disposition and
shall fix any of the terms and conditions thereof and the consideration
to be received by the corporation therefor, which may consist in whole
or in part of cash or other property, real or personal, including such
shares, bonds or other securities of any other domestic or foreign
corporation or corporations as are authorized investments for savings
banks, subject to those limitations applicable to such investments.
A verified copy of the minutes of the meeting at which the board of
trustees approves and authorizes the proposed transaction shall be filed
in the office of the superintendent together with a copy of the
agreement governing the proposed transaction, a statement setting forth
the reasons why the trustees believe the proposed transaction would be
in the best interest of the savings bank, its depositors and the public
and such other information as the superintendent may require. In
determining whether or not to approve the proposed transaction, the
superintendent shall consider whether the proposed transaction would be
in the best interests of the savings bank, its depositors and the public
and such other information as the superintendent may deem appropriate.
The superintendent shall notify the board of trustees in writing of his
or her determination. If the superintendent disapproves, the board of
trustees shall abandon the proposed transaction.
(c) In the case of a mutual corporation subject to the provisions of
article ten of this chapter, the board of directors of the corporation
by a majority vote of all the members thereof shall approve the proposed
sale, lease, exchange or other disposition and direct its submission to
a vote of shareholders.
Notice of meeting shall be given to each shareholder.
The shareholders shall authorize such sale, lease, exchange or other
disposition and may fix, or may authorize the board of directors to fix,
any of the terms and conditions thereof and the consideration to be
received by the corporation therefor, which may consist in whole or in
part of cash or other property, real or personal, including such shares,
bonds or other securities of any other domestic or foreign corporation
or corporations as are authorized investments for savings and loan
associations, subject to those limitations applicable to such
investments, by vote at a meeting of shareholders of the holders of
two-thirds in amount of the book value of all outstanding shares
entitled to vote thereon.
A verified copy of the minutes of the meetings at which the board of
directors and shareholders approve and authorize the proposed
transaction shall be filed in the office of the superintendent together
with a copy of the agreement governing the proposed transaction, a
statement setting forth the reasons why the directors believe the
proposed transaction would be in the best interest of the savings and
loan association, its shareholders and the public and such other
information as the superintendent may require. In determining whether or
not to approve the proposed transaction, the superintendent shall
consider whether the proposed transaction would be in the best interests
of the savings and loan association, its shareholders and the public.
The superintendent shall notify the board of directors in writing of his
or her determination. If the superintendent disapproves, the board of
directors shall abandon the proposed transaction.
2. Notwithstanding stockholder or shareholder authorization, the board
may abandon the proposed sale, lease, exchange or other disposition
without further action by the stockholders or shareholders, subject to
the rights, if any, of third parties under any contract relating
thereto.
3. This section shall not be applicable to a sale or disposition of
assets the acquisition of which is authorized by section six hundred
one-a of this chapter, or to any sale or other disposition of assets
after the entry of an order pursuant to subdivision four of section six
hundred five of this chapter, or to a sale or disposition of all or
substantially all of the assets by a mutual corporation subject to the
provisions of article six or article ten of this chapter to a national
banking association or national banking associations or a corporation or
corporations subject to the provisions of article three, article eight
or article twelve of this chapter or to a stock-form corporation subject
to article six or article ten of this chapter or to a stock-form federal
savings bank or to a stock-form federal savings and loan association.
S 602. Effect of merger. At the time when a merger becomes effective:
(1) the receiving corporation shall be considered the same business
and corporate entity as each corporation merged into it;
(2) all of the property, rights, powers and franchises of any
corporation that shall be so merged shall vest in the receiving
corporation and the receiving corporation shall be subject to and be
deemed to have assumed all of the debts, liabilities, obligations and
duties of such merged corporation and to have succeeded to all of its
relationships, fiduciary or otherwise, as fully and to the same extent
as if such property, rights, powers, franchises, debts, liabilities,
obligations, duties and relationships had been originally acquired,
incurred or entered into by the receiving corporation;
(3) any reference to a merged corporation in any contract, will or
document, whether executed or taking effect before or after the merger,
shall be considered a reference to the receiving corporation if not
inconsistent with the other provisions of the contract, will or
document;
(4) a pending action or other judicial proceeding to which any
corporation that shall be so merged is a party, shall not be deemed to
have abated or to have discontinued by reason of the merger, but may be
prosecuted to final judgment, order or decree in the same manner as if
the merger had not been made; or the receiving corporation may be
substituted as a party to such action or proceeding, and any judgment,
order or decree may be rendered for or against it that might have been
rendered for or against such other corporation if the merger had not
occurred.
No corporation organized under or subject to the provisions of this
chapter which subsequent to January first, nineteen hundred
thirty-eight, receives or has received into itself by merger pursuant to
any provision of law a corporation organized under or subject to the
provisions of any law other than this chapter shall, through such
merger, acquire power to engage in any business or to exercise any
right, privilege or franchise which is not conferred by the provisions
of this chapter upon such receiving corporation.
S 603. Issuance of new certificates of stock or other consideration.
The receiving corporation may require the return of the original
certificate or certificates held by each stockholder or shareholder in
such other corporation or corporations and may issue in lieu thereof new
certificates for such number of its own shares, or pay or deliver such
other consideration, as such stockholder or shareholder may be entitled
to receive under the merger plan.
S 604. Rights of dissenting stockholders.
The following stockholders shall, subject to and by complying with
section six thousand twenty-two of this chapter, have the right to
receive payment of the fair value of their shares and the other rights
and benefits provided by such section:
1. In the case of a merger pursuant to a plan submitted to
stockholders as provided in subdivision two of section six hundred one
of this chapter, any stockholder of the merging corporation entitled to
vote thereon who does not assent thereto;
2. In the case of a plan of acquisition of assets submitted to
stockholders as provided in subdivision two of section six hundred one-a
of this chapter, any stockholder of the selling corporation entitled to
vote thereon who does not assent thereto; and
3. In the case of a sale, lease, exchange or other disposition which
requires stockholder authorization under section six hundred one-c of
this chapter, any stockholder, entitled to vote thereon, of the
corporation making such sale, lease, exchange or other disposition who
does not assent thereto, except in the case of a transaction wholly for
cash where the stockholders` authorization thereof is conditioned upon
the distribution of all the net proceeds of such transaction to the
stockholders in accordance with their respective interests within one
year after the date of such transaction and upon the dissolution of the
corporation.
S 604-a. Transfer of fiduciary relationships of a banking institution.
1. If any banking institution, including a bank or trust company,
national banking association, savings bank, savings and loan
association, federally chartered savings bank, federally chartered
savings and loan association, located in this state, shall have
transferred all or substantially all of its assets to another banking
institution in a transaction subject to this chapter pursuant to a
written agreement between the transferor and transferee corporations
whereby the transferee corporation has assumed the deposit liabilities,
if any, of the transferor corporation and has agreed to assume all
fiduciary relationships of the transferor corporation, the transferee
corporation may file in the office of the superintendent a certificate
in its name and under its corporate seal, signed by its president,
secretary or cashier, setting forth a copy of such agreement and stating
that the transferee corporation assumes all of the fiduciary
relationships of the transferor corporation pursuant to the provisions
of this section; provided, however, that such certificate shall not be
filed unless the approval of the superintendent shall have been endorsed
thereon or annexed thereto before filing.
2. Upon the filing of such certificate in the office of the
superintendent, all of the property, rights, powers and franchises of
the transferor corporation as fiduciary shall vest in the transferee
corporation and the transferee corporation shall be deemed to have
assumed all of the debts, liabilities, obligations and duties of the
transferor corporation as fiduciary, and to have succeeded to all the
fiduciary relationships of the transferor corporation, as fully and with
the same effect as is provided in sections one hundred thirty-six-c and
six hundred two in the case of a merger, and any reference to the
transferor corporation as fiduciary in any capacity, contained in any
contract, will or document, whether executed or taking effect before or
after the filing of such certificate in the office of the
superintendent, shall be considered a reference to the transferee
corporation if not inconsistent with the other provisions of the
contract, will or document.
3. For the purposes of this section the fiduciary relationships of the
transferor shall include all relationships as agent, trustee, guardian,
receiver, committee, conservator, executor, administrator, or other
fiduciary in any capacity or for any purpose mentioned in section one
hundred, and all relationships of the transferor as bailee or depositary
of personal property.
4. This section shall not be deemed to authorize a transferee
corporation to assume any fiduciary relationship of a kind which it
would not otherwise have power to undertake and perform. Nothing in this
section shall be deemed to authorize any such transferee corporation to
maintain as its own office any office previously maintained by the
transferor corporation, and authority, if any, to maintain any such
office shall be governed by the applicable provisions of law other than
this section. This section shall not be deemed to apply to contracts of
the transferor for the leasing of safe deposit boxes or vaults.
S 605. Voluntary liquidation; sale of assets; forfeiture of charter by
non-user. 1. Any corporate banking organization, the assets of which
have a value at least equal to its liabilities, exclusive of any
liability to shareholders or stockholders, as such, may voluntarily wind
up its affairs; but no banking organization of which the superintendent
has taken possession in accordance with the provisions of section six
hundred six of this chapter shall take any steps for such voluntary
dissolution until it has received the written approval of the
superintendent.
2. To effect a voluntary dissolution of any corporation, a meeting of
the stockholders or shareholders of such corporation having full voting
rights, and if applicable any other stockholders or shareholders
authorized by the organization certificate or by-laws of such
corporation to vote on a resolution to effect a voluntary dissolution,
shall be held upon not less than twenty days` written notice to each
such stockholder or shareholder, either served personally or mailed to
the stockholder or shareholder at the address appearing upon the books
of the corporation, and containing a statement of the purpose for which
such meeting is called. Proof by affidavit of due service of such notice
shall be filed in the office of the corporation before or at the time of
such meeting.
In the case of a mutual savings bank, a meeting of its board of
trustees shall be held upon like notice. Proof by affidavit of due
service of such notice shall be filed in the office of the savings bank
before or at the time of such meeting.
3. At such a meeting of stockholders or mutual shareholders, such
stockholders or mutual shareholders may, by a vote of the owners of at
least two-thirds in amount of such stock, or of the capital of such
mutual corporation, direct that the corporation be closed and its
business wound up. The proceedings of such meeting shall be entered in
the minutes of such corporation.
At such a meeting of the board of trustees of a savings bank, the
trustees may by vote of not less than two-thirds of their whole number,
direct by resolution that the savings bank be closed and its business
wound up. The vote on such resolution shall be recorded with the
resolution in the minutes of the board of trustees.
A copy of the minutes of such meeting of stockholders or mutual
shareholders or board of trustees, verified by the presiding officer and
by the secretary of such meeting, shall be filed in the office of the
superintendent within five days after the date of such meeting.
4. Within three months after the date of any such meeting, application
may be made to the supreme court, after due notice to the
superintendent, for an order declaring the business of such corporation
closed. In a proper case, the court shall make such order which shall
prescribe the notice to be given to creditors and depositors to present
their claims to the corporation for payment. In the closing order, the
court shall set a date certain by which claims must be presented to the
corporation for payment. The corporation need not consider any claims
submitted after that date. Within five days after the making of such
order, a certified copy thereof shall be filed in the office of the
superintendent. Upon the entry of such order such corporation shall
cease to do business and shall wind up its affairs, pay its creditors
and depositors, if any, and, except in the case of a mutual savings
bank, distribute any remaining assets among its shareholders or
stockholders according to their respective rights and interests. The
corporation or any creditor or depositor thereof, upon due notice, may
apply to the court that issued the closing order for a determination as
to any disputed claim or for any other relief necessary to effectuate
the liquidation and dissolution of the corporation. Any petition,
application, or motion to vacate, set aside, modify or amend such order
so as to permit the corporation to resume business shall have
incorporated therein a certificate of the superintendent certifying that
after investigation the superintendent has found, and the banking board
by a three-fifths vote of all its members has found, that the public
convenience and advantage will be promoted by the granting of said
petition, application or motion.
4-a. (a) Such corporation may, at any time after entry of the order
described in subdivision four of this section, cause to be mailed to
each person claiming to be, or appearing upon the books of such
corporation to be
(1) the owner of any personal property in the custody or possession of
such corporation as bailee or depositary for hire or otherwise,
including the contents of any safe, vault or box theretofore opened for
non-payment of rental in accordance with the provisions of this chapter,
or
(2) the lessee of any safe, vault or box, a notice in writing directed
by registered mail to such person at his last address as the same
appears on the books of such corporation or at his last known address if
no address appears on such books, notifying such person to remove all
such property or the contents of any such safe, vault or box, within a
period stated in said notice, which period shall be not less than sixty
days from the date of such notice, and further notifying such person of
the terms and provisions of this subdivision. The contract of bailment
or of deposit for hire, or lease of safe, vault or box, if any, between
the person to whom such notice is mailed and such corporation shall
cease and determine upon the date for removal fixed in such notice. Such
person shall have a claim against such corporation for the amount of the
unearned rent or charges, if any, paid by such person from the date
fixed in such notice, if the property or contents is removed on or
before such date, or from the date of actual removal, if the property or
contents is removed after such date.
(b) If such property or contents shall not be removed, and all rent or
storage and other charges theretofore accrued, if any, shall not be
paid, within the time fixed by such notice, such corporation shall,
within thirty days thereafter, cause such property to be inventoried, or
such safe, vault or box, or any package, parcel or receptacle in the
custody or possession of such corporation as bailee or depositary for
hire or otherwise, to be opened and the contents, if any, to be removed
and inventoried, in the presence of an officer of such corporation and
of a notary public, not an officer or employee thereof. Such property or
contents shall thereupon be sealed up by such notary public in a package
distinctly marked by him with the name of the person in whose name such
property or such safe, vault, box, package, parcel or receptacle stands
upon the books of such corporation, and a copy of the inventory of the
property therein shall be certified and attached thereto by such notary
public. Such package may be kept in such place as the corporation, with
the approval of the superintendent, may determine, at the expense and
risk of the person in whose name it stands until delivered to such
person or until sold, destroyed or otherwise disposed of as hereinafter
provided. Such package may, from time to time, pending final disposition
of its contents, be opened in the presence of an officer of such
corporation and of a notary public, not an officer or employee thereof,
for inspection or appraisal, or to enable such corporation to exercise
any of the powers conferred or duties imposed by this article. Whenever
such package is opened, the notary shall endorse on the outside thereof
the date of opening and re-sealing, and shall certify and attach thereto
a list of the articles, if any, removed therefrom, or placed or replaced
therein, and an affidavit of the officer in whose presence it was opened
showing the reason for opening the same.
(c) At any time prior to the sale, destruction or other disposition of
the contents thereof, the person in whose name such package stands may
require the delivery thereof upon payment of all rental or storage
charges accrued, and all other charges or expenses paid or incurred to
the date of delivery with respect to such package or the contents
thereof, including the cost of inventorying or of opening and
inventorying, the fees of the notary public, the cost of preparing and
mailing the notice, and advertising, if any. If the principal of, or
interest, income, or dividends on any bonds, stock certificates,
promissory notes, choses in action or other securities contained in such
package, is or becomes due and payable while it is in the possession of
such corporation, it may at its election collect such principal,
interest, income or dividends, and from the proceeds thereof may deduct
all such sums due for rental and other charges, until the time of such
collection. The balance, if any, of the amount or amounts so collected
shall be disposed of as hereafter in paragraph (e) of this subdivision
and in subdivision five hereof provided.
(d) After the expiration of one year from the time of mailing the
notice in paragraph (a) of this subdivision described, such corporation
may apply to the supreme court for an order authorizing such corporation
to sell, destroy or otherwise dispose of the contents of such package.
In a proper case, the court shall make such order upon such terms and
conditions as justice may require. The application for an order of the
supreme court pursuant to this paragraph shall be made upon an order to
show cause, which shall provide that notice thereof to the person in
whose name such package stands and to any other person claiming or
appearing to have an interest therein, shall be published, mailed or
given in such other manner as the court may prescribe. Whenever,
pursuant to the provisions of this paragraph, a corporation is given the
power to sell the contents of any package, such power to sell shall be
deemed a power to sell in satisfaction of a lien for non-payment of
rental or storage charges accrued, and all other charges and expenses
paid or incurred to the date of sale with respect to such package and
the contents thereof, including the charges and expenses described in
paragraph (c) hereof. Such power to sell, or the power to destroy or
otherwise dispose of, when authorized pursuant to the provisions of this
paragraph, shall be deemed to include the power to sell, destroy or
otherwise dispose of, as the case may be, any bonds, stock certificates,
promissory notes, choses in action, or other securities, and any other
tangible or intangible property contained in any package, regardless of
whether or not it shall appear from such securities or properties that
the person in whose name the package stands, possesses title to or
interest in such securities or other properties, or power to transfer
such title or interest, and any sale of such securities or properties,
pursuant to this paragraph, shall vest good title thereto in the
purchaser thereof.
(e) From the proceeds of any sale, such corporation shall deduct all
rental or storage charges accrued, and all other charges and expenses
paid or incurred to the date of sale, including the charges and expenses
described in paragraph (c) hereof, and the expenses of sale. The balance
of such proceeds, if any, shall be credited to the person in whose name
such package stood and, unless sooner paid over to the superintendent
pursuant to subdivision five hereof, shall be paid over to such person,
his assignee or legal representative on satisfactory evidence of
identity.
(f) The provisions of this subdivision do not affect or preclude any
other remedy by action or otherwise for the enforcement of the claims or
rights of such corporation against the person in whose name any
property, or any safe, vault, box, package, parcel or receptacle stands,
nor affect, nor bar the right of such corporation to recover, before
sale, any debt or claim due it or, after sale, so much of the debt or
claim as shall not be paid by the proceeds of the sale.
(g) The procedure prescribed in this subdivision may be followed by
any corporation winding up its affairs in accordance with the provisions
of this section, notwithstanding the fact that such corporation may have
commenced proceedings to open, or may have opened, any safe, vault or
box for non-payment of rental in accordance with other provisions of
this chapter and notwithstanding the contents of any notice that may
have been given by such corporation in accordance with any requirement
of this section.
5. When such corporation shall have given the notice to creditors and
depositors to present their claims as prescribed in the order entered in
accordance with the provisions of subdivision four hereof, and shall
have paid all its debts and obligations for which a legal claimant has
been found, and shall have complied with the provisions of subdivision
four-a hereof, it shall, before applying to court for a release upon
final accounting or for a final order of dissolution, make a verified
transcript or statement from its books of the names of all depositors,
creditors, stockholders, shareholders, owners of personal property in
the custody or possession of such corporation as bailee, depositary for
hire or otherwise, or lessees of any safe, vault or box, who have not
claimed or have not received the deposits, debts, dividends, interest
balances or other amounts due them, and shall file such transcript or
statement with the superintendent together with all identifying
information, including, in the case of unclaimed proceeds of any sale
pursuant to subdivision four-a hereof, a certified copy of the
inventory, and an affidavit showing compliance with the provisions of
said subdivision, a list of the articles sold, the price or prices
obtained therefor, and the amount or amounts deducted and retained from
the proceeds and such corporation shall thereupon pay over such
unclaimed amounts to the superintendent as trustee for the persons
entitled to receive them, as provided in article two of this chapter.
6. Upon the petition of such corporation showing
(a) that all its debts and obligations have been discharged except
those for which no legal claimant has been found,
(b) that notice was given to creditors and depositors to present their
claims as prescribed by the court and that any period prescribed by the
court for the presentation of such claims has expired,
(c) that the provisions of subdivision four-a hereof, if applicable,
have been complied with and
(d) that all unclaimed amounts referred to in subdivision five hereof
have been paid over to the superintendent, and on notice to the
comptroller and the superintendent and such further notice as the court
may prescribe, the court may, on such terms as justice requires, make an
order affirming such disposition of such unclaimed amounts and declaring
such corporation dissolved and its corporate existence terminated.
7. On filing with the superintendent a certified copy of the order of
dissolution described in the last preceding subdivision of this section,
the corporation shall cease to exist.
8. Unless the banking board by a three-fifths vote of all its members
shall otherwise provide, any corporate banking organization that,
pursuant to an agreement, sells or conveys more than fifty per centum of
its assets without the written approval of the superintendent shall take
the proceedings for voluntary dissolution herein prescribed and, within
six months from the date of such sale or conveyance, shall file with the
superintendent a certified copy of the closing order in the form
prescribed by subdivision four of this section. The corporate banking
organization, upon making written application to the superintendent for
approval of the sale or conveyance of more than fifty per centum of its
assets, shall pay an investigation fee of two hundred fifty dollars. If
a closing order is required to be filed pursuant to this subdivision and
such order is not filed within the time prescribed, the superintendent
shall have the power, in his or her discretion, to take possession of
the business and property of such corporation and proceed with the
liquidation thereof under the provisions of this article.
9. If the superintendent shall certify that any corporate banking
organization is deemed by him to have abandoned and forfeited its
charter by non-user and to be virtually in process of liquidation, such
corporation, if its assets have a value at least equal to its
liabilities, exclusive of any liability to shareholders or stockholders,
as such, shall take the proceeding for voluntary dissolution herein
prescribed and, within six months from the date of such certificate,
shall file with the superintendent a certified copy of the closing order
in the form prescribed by subdivision four of this section. If such
order is not filed within the time prescribed, the superintendent shall
have the power, in his discretion, to take possession of the business
and property of such corporation and proceed with the liquidation
thereof under the provisions of this article.
10. (a) Upon the petition of the superintendent showing
(1) that any corporate banking organization has ceased to transact
business, or has commenced but failed to complete proceedings for its
voluntary dissolution in accordance with the banking law, or for any
other reason is deemed by the superintendent to have abandoned and
forfeited its charter by non-user, and
(2) that all of its assets have been distributed, or that the
superintendent has no knowledge as to the existence of any such assets,
the supreme court in the judicial district where such banking
organization maintained its principal place of business may make an
order declaring such corporation dissolved and the corporate existence
thereof terminated. Upon the filing of a certified copy of such order in
the office of the superintendent the existence of such corporation shall
cease and determine.
(b) If the petition of the superintendent shall show, in addition to
the allegations required by the provisions of subparagraph (1) of
paragraph (a) of this subdivision, that such banking organization
(1) has undistributed assets and it appears that in the opinion of the
superintendent the cost of taking possession of and liquidating such
assets in accordance with the provisions of this article will exceed the
fair value of such assets, and
(2) has failed, for a period of two years after ceasing to transact
business or commencing proceedings for its voluntary dissolution, to
complete such proceedings or to produce proof satisfactory to the
superintendent that it has complied with or is in the process of
complying with the provisions of the banking law, the court may, upon
such notice as it may prescribe, make an order declaring such
corporation dissolved and the corporate existence thereof terminated,
and further declaring that such assets have been abandoned and providing
for the payment, delivery or transfer thereof to the superintendent in
such manner and at such time as the court may direct. Upon the filing of
a certified copy of such order in the office of the superintendent the
existence of such corporation shall cease and determine. At any time
within six months after the entry of such order, the court may upon good
cause shown and upon such terms as justice may require, vacate or modify
such order. At the expiration of such six-month period or such further
period as the court may prescribe, the superintendent shall sell, redeem
or otherwise dispose of such assets and from the proceeds thereof may
retain and pay all costs, disbursements and legal fees allowed by the
court and any assessments, penalties or forfeitures incurred by such
banking organization under the banking law. The remaining proceeds if
any shall forthwith be paid into the state treasury for the use and
benefit of the state.
11. (a) Any foreign banking corporation which has been licensed
pursuant to article five of this chapter to engage in business in this
state, including any such corporation whose license has expired or been
revoked, may, if it so desires, take proceedings for the voluntary
liquidation of its business and property in this state in accordance
with the provisions of paragraph (b) of this subdivision; but no such
liquidation shall be commenced while the superintendent is in possession
of such business and property unless such corporation shall have first
received the written approval of the superintendent. In any such
liquidation the claims of creditors of such corporation arising out of
transactions had by them with its New York agency or agencies or branch
or branches shall be accorded the same preference accorded to similar
claims in a liquidation under subdivision four of section six hundred
six of this article.
(b) To effect such a voluntary liquidation, a foreign corporation
shall subscribe, acknowledge and file with the superintendent at his
office a written notice of its intention so to liquidate, which notice
shall specify the date of commencement of the liquidation, and upon such
date, such corporation shall forthwith cease to transact business in
this state if it has not already done so, and shall proceed to wind up
its affairs in this state. Within thirty days after such date, such
corporation shall make application to the supreme court, after due
notice to the superintendent, for an order prescribing the notice to be
given to the preferred creditors hereinabove described to present their
claims for payment. Every such corporation shall, in the course of such
liquidation, comply with the provisions of subdivisions four-a, five and
six of this section, except that an order entered pursuant to
subdivision six of this section shall affirm the disposition of the
unclaimed amounts therein referred to and shall authorize the turn-over
of all of the assets remaining after payment of the preferred creditors
to the principal office of such corporation. Within five days after the
making of any order described in this paragraph a certified copy thereof
shall be filed in the office of the superintendent.
(c) Any foreign banking corporation which has been licensed pursuant
to article five of this chapter to engage in business in this state,
which shall liquidate its business and property in this state without
electing to comply with the provisions of paragraphs (a) and (b) of this
subdivision, shall, upon completion of the liquidation, make a verified
transcript or statement from its books of the names of all creditors
whose claims arise out of transactions had by them with its New York
agency or agencies, or its New York branch or branches and of all owners
of personal property in the custody or possession of such agency or
agencies or branch or branches as bailee, depositary for hire or
otherwise, who have not claimed or have not received the debts or other
amounts due them, and shall file such transcript or statement with the
superintendent together with all identifying information, including, in
the case of unclaimed proceeds of any sale of personal property, a list
of the articles sold, the price or prices obtained therefor, and the
amount or amounts deducted and retained from the proceeds, and such
corporation shall thereupon pay over such unclaimed amounts to the
superintendent as trustee for the persons entitled to receive them, as
provided in article two of this chapter. Any such corporation so
liquidating its business and property in this state may, if it so
desires, follow the procedures for the disposition of personal property
in the custody or possession of, and exercise the same powers and
privileges with respect thereto accorded to, banking organizations in
subdivision four-a of this section. To effectuate the purposes of this
chapter, the superintendent may impose additional requirements and
procedures for the foreign banking corporation to follow with respect to
the dissolution of the licensed office.
(d) For the purposes of this subdivision, the words "debts",
"obligations" and "deposits", as used in subdivisions four-a, five and
six of this section, shall be deemed to refer to the preferred claims
hereinabove described, the words "creditors" and "depositors" shall be
deemed to refer to the owners of such preferred claims, the references
in subdivisions four-a and five of this section to the order entered in
accordance with subdivision four of this section shall be deemed to
refer to the like order entered in accordance with the provisions of
this subdivision, and, except when the context shall otherwise require,
the word "corporation" shall be deemed to refer to the New York agency
or agencies, or branch or branches and the word "officer" shall include
the agent or other person in charge of such agency or agencies and any
person in charge of or who is an officer of such branch or branches or
of the liquidation.
12. If the superintendent shall at any time find that any of the
reasons enumerated in section six hundred six of this article for
takeover of the business and property of a banking organization or of
the business and property in this state of a foreign banking corporation
shall exist, he may, in his discretion, forthwith take possession of
such business and property in accordance with the provisions of such
section notwithstanding that such banking organization or corporation
may have theretofore commenced proceedings for the voluntary liquidation
of such business and property in accordance with this section.
S 605-a. Transfer of deposit liabilities of bank or trust company;
sale or pledge of assets to facilitate such transfer. 1. A bank or trust
company may, pursuant to a plan approved by the superintendent, enter
into an agreement with another bank or trust company, whereby its
liabilities to depositors will be assumed by such other bank or trust
company. To facilitate the consummation of such plan and agreement, such
bank or trust company may borrow money from the Federal Deposit
Insurance Corporation and pledge all or any part of its assets as
security for the money so borrowed, or it may sell all or any part of
its assets to Federal Deposit Insurance Corporation and the money so
borrowed or realized with or without any other assets belonging to such
bank or trust company, may be transferred by it to such other bank or
trust company, in consideration of the latter`s agreement to assume and
pay the deposit liabilities of the former. If the superintendent shall
thereafter take possession of the business and property of such bank or
trust company, pursuant to this article, the validity of a claim against
such bank or trust company which was in existence when such plan was
consummated and remains unpaid shall be determined pursuant to the
provisions of section six hundred twenty to six hundred twenty-five
inclusive of this article as though such plan had not been consummated.
Nothing in this section nor in any plan consummated pursuant to this
section shall be deemed to require allowance of any claim if such claim
would not otherwise be allowable in the liquidation proceedings. If such
claim is allowed or ultimately established, the owner thereof shall be
entitled to dividends on his claim as though such plan had not been
consummated, and as though the assets of such bank or trust company had
been taken over for liquidation immediately prior to any sale, pledge or
transfer made pursuant to such plan. If such bank or trust company in
liquidation does not have sufficient other assets to pay such dividends,
the deficiency shall be paid from the proceeds of the sale or
liquidation of the assets sold or pledged by such bank or trust company
to Federal Deposit Insurance Corporation. If such proceeds prove
insufficient to pay such deficiency in full, any remaining deficiency
shall be paid from the proceeds of the sale or liquidation of the assets
transferred by such bank or trust company to such other bank or trust
company, exclusive of cash representing the proceeds of a sale to or a
loan from Federal Deposit Insurance Corporation. The superintendent
shall take such action as he shall deem necessary and appropriate to
protect the interests of the owner of any such claim, but he shall not
be required to obtain possession of any of the assets from the proceeds
of which the deficiency in dividends upon such claim is payable, unless
it shall appear that the amount required for the payment of such
deficiency is not otherwise available. The superintendent may, subject
to the approval of the supreme court in the judicial district where the
principal office of such bank or trust company is located, enter into an
agreement with the Federal Deposit Insurance Corporation and the bank or
trust company to which any assets of such bank or trust company have
been transferred, or either of them, whereby payments shall be made to
him as trustee for the benefit of the person or persons entitled thereto
from time to time as cash is realized from the sale or liquidation of
the assets from the proceeds of which claims are payable. If such
agreement is approved by the supreme court, after notice of a kind which
the court deems to be adequate to all persons whose interests, in the
opinion of the court, may be affected thereby, such agreement shall be
binding upon all such persons. No action may be brought by any such
person to enforce payment of his claim unless it be clearly shown that
the superintendent has refused or failed to take necessary and
appropriate action to protect the interests of such person. No sale,
conveyance or transfer by a bank or trust company of all or any part of
its assets shall be deemed to have been made pursuant to the provisions
of this section unless the plan approved by the superintendent shall
expressly so state. Nothing contained in this section shall be deemed to
repeal, limit, modify or otherwise affect any right or power of a bank
or trust company to sell, convey or transfer all or any part of its
assets pursuant to any other provision of law.
2. A bank or trust company assuming the deposit liabilities of another
bank or trust company in connection with a plan pursuant to this section
may issue preferred shares which, to the extent permitted by the
superintendent, may have a retirable value greater than the amount
received in payment for such shares.
S 606. When superintendent may take possession of banking
organization; when possession may be surrendered. 1. The superintendent
may, in his discretion, forthwith take possession of the business and
property of any banking organization whenever it shall appear that such
banking organization:
(a) Has violated any law;
(b) Is conducting its business in an unauthorized or unsafe manner;
(c) Is in an unsound or unsafe condition to transact its business;
(d) Cannot with safety and expediency continue business;
(e) Has an impairment of its capital; or, in the case of a mutual
savings and loan association or credit union, has assets insufficient to
pay its debts and the amount due members upon their shares;
(f) Has suspended payment of its obligations; or, in the case of a
mutual savings and loan association, has failed for sixty days after a
withdrawal application has been filed with it by any shareholder to pay
such withdrawal application in full;
(g) Has neglected or refused to comply with the terms of a duly issued
order of the superintendent;
(h) Has refused, upon proper demand, to submit its records and affairs
for inspection to an examiner of the department;
(i) Has refused to be examined upon oath regarding its affairs.
(j) Has neglected, refused or failed to take or continue proceedings
for voluntary liquidation in accordance with any of the provisions of
this chapter.
2. The superintendent may, in his discretion, and upon such conditions
as may be approved by him, surrender possession and permit such banking
organization to resume business.
3. When the superintendent shall have duly taken possession of the
property and business of any such banking organization, he may hold such
possession until its affairs are finally liquidated by him, unless he
shall surrender possession as provided in subdivision two of this
section or be enjoined from continuing possession as provided in section
six hundred seven of this article, or unless such banking organization
shall, with the written approval of the superintendent, voluntarily wind
up its affairs as provided in section six hundred five of this article.
4. (a) The superintendent may also, in his or her discretion,
forthwith take possession of the business and property in this state of
any foreign banking corporation that has been licensed by the
superintendent under the provisions of this chapter, including, for the
purposes of this article, any such corporation whose license has been
surrendered or revoked, upon his or her finding that any of the reasons
enumerated in subdivision one of this section exist with respect to such
corporation or that it is in liquidation at its domicile or elsewhere or
that there is reason to doubt its ability or willingness to pay in full
the claims of the creditors hereinbelow described. Title to such
business and property shall vest by operation of law in the
superintendent and his or her successors forthwith upon taking
possession. Thereafter the superintendent shall liquidate or otherwise
deal with such business and property in accordance with the provisions
of this chapter applicable to the liquidation of banking organizations,
except that the superintendent may deal with such business and property
and prosecute and defend any and all actions relating thereto in his or
her own name as superintendent. Only the claims of creditors of such
corporation arising out of transactions had by them with its New York
agency or agencies, or with its New York branch or branches, shall be
accepted by the superintendent for payment out of such business and
property in this state as provided in this article. Acceptance or
rejection of such claims by the superintendent shall not prejudice such
creditors` rights to otherwise share in the assets of such corporation.
The following claims shall not be accepted by the superintendent for
payment out of such business and property in this state: (1) claims
which would not represent an enforceable legal obligation against such
branch or agency if such branch or agency were a separate and
independent legal entity; and (2) amounts due and other liabilities to
other offices, agencies or branches of, and affiliates of, such foreign
banking corporation.
(b) Whenever the accepted claims, together with interest thereon, if
interest was paid, and the expenses of the liquidation have been paid in
full or properly provided for, the superintendent upon the order of the
supreme court shall turn over the remaining assets to, in the first
instance, other offices of the foreign banking corporation that are
being liquidated in the United States, upon the request of the
liquidators of those offices, in amounts which the liquidators of those
offices demonstrate to the superintendent are needed to pay the claims
accepted by those liquidators and any expenses incurred by the
liquidators in liquidating those other offices of the foreign banking
corporation. After such payments, if any, have been made, any assets of
the foreign banking corporation remaining in the hands of the
superintendent shall be turned over to the principal office of such
foreign banking corporation, or to the duly appointed domiciliary
liquidator or receiver of said foreign banking corporation. Dividends
and other amounts remaining unclaimed or unpaid in the hands of the
superintendent for six months after such turn-over shall be deposited by
him or her as provided in article two of this chapter.
(c) As used in this subdivision the phrase "business and property in
this state" includes, but is not limited to, all property of the foreign
corporation, real, personal or mixed, whether tangible or intangible,
(1) wherever situated, constituting part of the business of the New York
agency or branch and appearing on its books as such, and (2) situated
within this state whether or not constituting part of the business of
the New York agency or branch or so appearing on its books.
(d) For the purposes of this subdivision, the words "debts",
"obligations", "deposits" and other similar terms as used in subsequent
sections of this article, shall be deemed to refer to the claims that
the superintendent shall accept pursuant to paragraph (a) of this
subdivision, the words "creditors" and "depositors" shall be deemed to
refer to the owners of such accepted claims and, except when the context
shall otherwise require, the terms "banking organization" and
"corporation" shall be deemed to refer to the New York agency or
agencies or branch or branches and the word "officer" shall include the
agent or other person in charge of such agency or agencies and any
person in charge of or who is an officer of such branch or branches. As
used in this subdivision, (i) "affiliate" shall mean any person, or
group of persons acting in concert, that controls, is controlled by or
is under common control with such foreign banking corporation and (ii)
"control" means any person, or group of persons acting in concert,
directly or indirectly, owning, controlling or holding with power to
vote, more than fifty percent of the voting stock of a company, or
having the ability in any manner to elect a majority of the directors of
a company, or otherwise exercising a controlling influence over the
management and policies of a company as defined by the superintendent by
regulation. For purposes of this subdivision, the term "person" shall
mean a corporation, unincorporated association, partnership, or any
other entity or individual.
5. The term "banking organization" as used in this and subsequent
sections of this article shall be deemed to include a corporation which
has engaged in any business or other activity prohibited by section one
hundred thirty-one of this chapter, and an unincorporated association,
partnership, fiduciary or individual who has engaged in any business or
other activity prohibited by section one hundred eighty of this chapter.
6. (a) In the case of the liquidation of an investment company by the
superintendent, accepted claims, amounts due and other liabilities owed
to affiliates of such investment company shall be paid only after all
accepted claims, amounts due and other liabilities owed have been fully
paid to such creditors and other claimants of the investment company
that are not affiliates of such investment company.
(b) For the purposes of this subdivision, (i) "affiliate" shall mean
any person, or group of persons acting in concert, that controls, is
controlled by or is under common control with such investment company,
and (ii) "control" means any person, or group of persons acting in
concert, directly or indirectly, owning, controlling, or holding with
power to vote, more than fifty percent of the voting stock of a company,
or having the ability in any manner to elect a majority of the directors
of a company, or otherwise exercising a controlling influence over the
management and policies of a company as defined by the superintendent by
regulation. For purposes of this subdivision, the term "person" shall
mean a corporation, unincorporated association, partnership, or any
other entity or individual.
S 607. Manner and time within which taking possession may be tested.
At any time within ten days after the superintendent has taken
possession of the property and business of any banking organization such
banking organization may apply to the supreme court in the judicial
district in which its principal office is located, for an order
requiring the superintendent to show cause why he should not be enjoined
from continuing such possession. The court may, upon good cause shown,
direct the superintendent to refrain from further proceedings and to
surrender such possession.
S 609. Resumption of business by bank, trust company or industrial
bank; retirement of certificates; applicability to stock-form savings
banks and stock-form savings and loan associations. 1. Any bank, trust
company, stock-form savings bank or stock-form savings and loan
association of which the superintendent has taken possession or which is
operating under restrictions imposed by duly constituted authority may
be permitted by the superintendent, in his discretion and subject to
such conditions as may be approved by him, to resume business in
accordance with the provisions of this section.
2. No bank, trust company or industrial bank permitted by the
superintendent to resume business in accordance with the provisions of
this section shall, without previously obtaining the written permission
of the superintendent, pay, on account of any deposit made or debt
incurred before such restrictions were imposed or before the
superintendent took possession of such bank, trust company or industrial
bank, more than that proportion of eighty per centum of the total value
of its sound assets, as determined by the superintendent, which such
deposit or debt bears to the total of the deposits and debts of such
bank, trust company or industrial bank at the time of resuming business:
provided that nothing contained in this section shall affect any
preference created by any law of this state for the benefit of any
depositor or creditor or impair the rights of any secured depositor or
creditor in any assets lawfully pledged or assigned as such security.
For the purposes of this section, the holder of a judgment against any
such bank, trust company or industrial bank for the payment of money
arising out of a cause of action arising prior to such resumption of
business, whether such judgment was recovered prior or subsequent to
such resumption of business, shall have the same rights as if he were a
depositor having a balance equal to the amount of such judgment at the
time such restrictions were imposed or at the time the superintendent
took possession of such bank, trust company or industrial bank. The
superintendent shall prepare for each such bank, trust company or
industrial bank a list of the assets which, in his judgment, are sound
and the value thereof as determined by him.
3. Such bank, trust company or industrial bank shall, immediately upon
resuming business, issue to its depositors and creditors non-negotiable
transferable certificates, in a form approved by the superintendent,
representing the part of its deposits and debts which it is not
authorized to pay at that time under the provisions of subdivision two
of this section. Such certificates shall bear interest, if any, at a
rate not in excess of three per centum per annum.
4. The superintendent shall from time to time determine the excess of
the value of the sound assets of such bank, trust company or industrial
bank over the total of the principal amount of such certificates
outstanding and of the deposits and debts of such bank, trust company or
industrial bank not represented by such certificates, including deposits
made and debts incurred after resuming business. The amount by which
such excess is greater than the excess of the value of the sound assets
of such bank, trust company or industrial bank, determined as provided
in subdivision two of this section, over its total deposits and debts at
the time of resuming business may, unless the superintendent
disapproves, be paid pro rata on account of the principal due on such
certificates or, if the principal has been paid in full, on account of
the interest, if any, due thereon. No such bank, trust company or
industrial bank shall, without previously obtaining the written
permission of the superintendent, make any other payment on account of
the principal or interest of such certificates.
5. No dividends shall be paid on the stock of such bank, trust company
or industrial bank while any such certificates are outstanding, unless,
having previously secured the written permission of the superintendent
to pay such certificates, it shall set aside and maintain a sum
sufficient for the payment of all such outstanding certificates and the
interest, if any, accrued thereon and shall publish once a week for two
calendar weeks in a newspaper published in the county in which its
principal office is located, notice to the effect that it will pay all
such certificates and the interest, if any, accrued thereon upon due
presentation for payment. If, thereafter, any such certificate together
with all interest, if any, accrued thereon, shall not be paid when so
presented, the authority of such bank, trust company or industrial bank
to pay such dividends shall cease.
6. So long as any of such certificates are outstanding, every holder
of such a certificate shall have the same right to notice of all regular
or special meetings of the stockholders of such bank, trust company or
industrial bank and to attend and to vote in person or by proxy at such
meetings as would a holder of stock of the par value of the unpaid
principal amount of such certificate, except that no holder of a
certificate or certificates shall be entitled to vote upon any change in
respect to shares or capital stock pursuant to title eight of article
fifteen or to receive notice of or attend a meeting of stockholders
specially called for that purpose. Within sixty days after such bank,
trust company or industrial bank has resumed business a meeting of its
stockholders and holders of such certificates shall be called upon
notice prescribed by the superintendent. At such meeting directors shall
be elected who shall succeed the former directors, and the directors so
elected shall elect officers who shall succeed the former officers.
Directors in office at the date of such meeting may be elected at such
meeting to succeed themselves and the directors elected at such meeting
may elect officers then serving to succeed themselves.
7. If the superintendent shall retake possession of the business and
property of such bank, trust company or industrial bank while any such
certificates are still outstanding and liquidate its business as
elsewhere provided in this chapter, deposits and debts not represented
by such certificates, including deposits made and debts incurred after
resuming business, shall be entitled to payment of principal and
interest in priority to the payment of the principal and interest of
such certificates.
8. (a) A plan for the retirement of certificates issued or made
available by a bank, trust company or industrial bank pursuant to the
provisions of this section may be promulgated in accordance with this
subdivision eight in any case where the value of all the assets of such
bank, trust company or industrial bank as determined by the
superintendent is less than the aggregate of the amounts owing to
depositors and other creditors plus the unpaid amount of all such
certificates so issued or made available by such bank, trust company or
industrial bank. Such plan may be promulgated by such bank, trust
company or industrial bank or by the holders of ten per centum or more
in principal amount of all such outstanding certificates or the
representative or representatives of such holders.
(b) Such plan may provide for any one or more of the following:
(1) The retirement of certificates by the issuance in exchange
therefor of shares of capital stock or debentures or both of such bank,
trust company or industrial bank;
(2) The issuance of preferred stock of such bank, trust company or
industrial bank and the sale of such preferred stock for cash or its
exchange for real or personal property or for outstanding capital notes,
debentures or other obligations of such bank, trust company or
industrial bank;
(3) The issuance of fractional shares of capital stock of such bank,
trust company or industrial bank in exchange for certificates or
portions thereof in unpaid amount insufficient to permit the exchange
thereof for a full share of capital stock. Such fractional shares of
capital stock shall have no voting rights, but, when combined with other
fractional shares in sufficient amount, shall be convertible into a full
share or shares of capital stock;
(4) The transfer into a separate account upon the books of such bank,
trust company or industrial bank or to a separate corporation, of any
assets to be liquidated for the pro rata benefit of certificate holders
and the issuance to certificate holders of evidences of participation in
such assets if transferred into a separate account upon the books of
such bank, trust company or industrial bank, or of stock or obligations
or both of such separate corporation, if such assets are transferred to
a separate corporation;
(5) The organization of a corporation to issue its stock or
obligations or both in exchange for certificates and for the exchange of
certificates so acquired by such corporation for shares of the capital
stock or debentures or both of such bank, trust company or industrial
bank;
(6) The amount of capital stock which such bank, trust company or
industrial bank shall have upon the plan becoming effective, the
classes, if any, into which such capital stock shall be divided, the
number of shares in each class and the par value of each share.
In addition to provisions herein specifically authorized to be
contained in a plan promulgated pursuant to this subdivision, such plan
may also contain any other provisions deemed necessary or convenient to
effectuate the general purpose or purposes of the plan.
(c) The person or persons promulgating such plan shall first submit it
to the superintendent for his approval. If the plan is approved by the
superintendent, such person shall within sixty days of such approval
submit it to the supreme court in and for the county in which the
principal office of such bank, trust company or industrial bank is
located, together with an application for its approval. Such application
shall set forth such facts as may be necessary to enable the court to
determine the fairness of such plan and shall be made upon an order to
show cause which shall provide that notice thereof of a kind which the
court deems to be adequate shall be given by such bank, trust company or
industrial bank to all holders of such certificates and all other
persons whose interests, in the opinion of the court, may be affected by
such plan. If the issue is raised in any proceeding involving a plan
promulgated pursuant to this subdivision, a certificate executed by the
superintendent and filed with the court shall be presumptive evidence of
the fact that the value of all of the assets of such bank, trust company
or industrial bank is less than the aggregate of the amounts owing to
depositors and other creditors plus the unpaid amount of all such
certificates issued or made available by such bank, trust company or
industrial bank.
(d) The superintendent or the bank, trust company or industrial bank
or any person or persons authorized to promulgate a plan hereunder may
propose and submit to the court an alternative plan or a modification or
modifications of any plan before the court. The court may modify any
such plan or may propose a new or alternative plan, provided, however,
that a modification or modifications, whether proposed by the court or
by any other person or persons, may be made only after a hearing upon
notice to all holders of certificates and all other persons whose
interests, in the opinion of the court, may be affected thereby, and
subject to the right of any person who shall previously have consented
to such plan to withdraw such consent within a period to be prescribed
by the court and after such notice as the court may direct. If any
person having such right of withdrawal shall not withdraw within the
period so prescribed he shall be deemed to have approved such plan as so
modified.
(e) After the hearing or hearings above provided the court shall by
order approve a plan, with or without modifications, or shall reject all
such plans, provided, however, that no order made pursuant to this
paragraph approving such plan shall be made or entered unless such plan,
in final form, shall first have been approved in writing by the
superintendent and such written approval shall have been filed in the
proceeding. If at the time of making the order approving such plan, the
court is satisfied that the holders of two-thirds in amount of such
certificates have approved such plan, the order of the court shall
recite such fact and shall declare that such plan shall be effective
upon the filing by the superintendent in the office of the clerk of the
county in which is located the principal office of such bank, trust
company or industrial bank of the certificate required to be filed
pursuant to paragraph (k) of this subdivision. If at the time of making
such order, such plan shall not have been approved by the holders of
two-thirds in amount of such certificates, such order shall provide that
upon satisfactory proof of the fact that the holders of two-thirds in
amount of such certificates shall have approved the same, a further
order may be entered ex parte declaring that such plan shall be
effective upon the filing by the superintendent in the office of the
clerk of the county in which is located the principal office of such
bank, trust company or industrial bank of the certificate required to be
filed pursuant to paragraph (k) of this subdivision.
(f) Upon the entering of an order declaring that such plan shall be
effective upon the filing by the superintendent in the office of the
county clerk of the certificate required to be filed pursuant to
paragraph (k) of this subdivision, such plan shall become binding upon
the holders of all certificates of such bank, trust company or
industrial bank and all such holders shall be conclusively deemed to
have consented to all the terms and conditions of such plan whether or
not all of such holders shall actually have consented thereto and
whether or not all of them shall have received notice thereof or of the
hearing thereon hereinbefore provided.
(g) Every executor, administrator, trustee, guardian, committee,
conservator, receiver, or other fiduciary, and every public and private
corporation or association, and every political and public
instrumentality or body, including, but not by way of limitation of the
generality of the foregoing, boards of education and school districts
and other special districts, is hereby authorized and empowered to
approve and accept a plan promulgated pursuant to this subdivision and
to execute and deliver such papers and documents as may be necessary or
proper to evidence such approval and acceptance, and shall not be
subject to any liability whatsoever for any such approval or acceptance
or any exchange of certificates for stock or other securities or both
made pursuant thereto.
(h) A plan promulgated pursuant to this subdivision may be effectuated
even though it has not been expressly approved by the holders of
two-thirds in amount of all outstanding certificates, provided, as an
alternative to such express approval, the provisions of this paragraph
have been complied with. After the plan is approved by the
superintendent as provided by paragraph (c) of this subdivision, the
person or persons promulgating such plan shall file a copy thereof with
the clerk of the court and shall prepare and mail to each of the holders
of such certificates and to each of the holders of stock of the bank,
trust company or industrial bank, addressed by registered mail to him,
postage prepaid, to his last known address as the same appears on the
records of the bank, trust company or industrial bank, a summary of such
plan together with a notice stating in substance that such plan will be
presented to the supreme court in and for the county in which the
principal office of the bank, trust company or industrial bank is
located, and designating a date, which date shall not be less than
thirty days after the mailing of such notice, when such court will
consider such plan and hear any objection thereto on the part of any
holder of a certificate or of stock. Such notice shall also be published
by the person or persons promulgating such plan once, at least twenty
days before said date, in a daily newspaper of general circulation
published in the county where such hearing is to be had and if no such
daily newspaper is published in such county, then such notice shall be
![]()
Top of Page
published in a newspaper of general circulation in said county. Upon the
return of such notice or any adjourned date or dates thereof, the court
shall hear the parties interested therein and may accept proof in
affidavit form or otherwise as to any facts and circumstances material
thereto. The court upon proof by affidavit that the provisions hereof
with respect to mailing and publication have been fully complied with
shall thereupon approve, modify or disapprove such plan, but in no event
shall any such plan, with or without modifications, be approved by the
court unless the court deems such plan fair and equitable to the holders
of certificates and unless such plan, in final form, shall first have
been approved in writing by the superintendent, and such written
approval shall have been filed in the proceeding; or if written dissent
therefrom, duly executed and acknowledged, shall be filed with the clerk
of the court prior to such return date, or prior to such other date as
may be fixed by the court, by the holders in the aggregate of more than
thirty-three and one-third per centum of the face amount of the
certificates affected by such plan. All holders of certificates who have
not dissented from the plan in the manner provided by this paragraph and
prior to the return date or such other date as may be fixed by the court
shall be conclusively deemed to have assented thereto. Such plan shall
contain a provision in respect of certificate holders dissenting
thereto, to the effect that adequate protection will be provided for the
realization by them of the value of their certificates by such method as
will in the opinion of the court, under and consistent with the
circumstances of the particular case, be equitable and fair to them.
When such plan, with or without modifications, shall be approved by the
court, the court shall make an order reciting such approval and
declaring that such plan shall be effective upon the filing by the
superintendent in the office of the clerk of the county in which is
located the principal office of such bank, trust company or industrial
bank of the certificate required to be filed pursuant to paragraph (k)
of this subdivision. The appellate court to which an appeal is taken by
any dissenting certificate holder or by any stockholder from any action
by the court pursuant to this section shall have the right to impose
upon the appellant as part of the costs of the appeal, reasonable fees
of counsel for the respondent, and such appellate court may also, in its
discretion, require bond therefor before entertaining any such appeal.
(i) Upon the entering of an order declaring that such plan shall be
effective upon the filing by the superintendent in the office of the
county clerk of the certificate required to be filed pursuant to
paragraph (k) of this subdivision, such steps shall be taken by the
superintendent and all other persons, and all acts shall be done as may
be required by such plan and as may be necessary or desirable to make
such plan operative. Within ten days after the entering of such order,
the superintendent shall issue an order pursuant to article two of this
chapter directing that such bank, trust company or industrial bank shall
forthwith make good the impairment of its capital. Upon receipt of such
order, the directors of the bank, trust company or industrial bank shall
give notice to each stockholder of such requisition and of the amount of
the assessment he must pay, which amount shall be the aggregate par
value of his shares. Such notice shall be mailed to each stockholder at
his address appearing on the records of the bank, trust company or
industrial bank or shall be served personally upon him. Notwithstanding
any provision of section one hundred fourteen or section three hundred
six of this chapter, all outstanding stock certificates of the bank,
trust company or industrial bank shall be canceled of record not less
than thirty days after notice of assessment is given to stockholders as
herein provided, and thereupon such stock certificates shall be null and
void for all purposes and the rights of the holders thereunder shall
cease and determine; provided, however, that each stockholder who pays
the full amount of such assessment within thirty days after notice of
assessment is given as herein provided shall receive, in lieu of the
stock on account of which such assessment was paid, new stock in the
amount to which he would be entitled if he held certificates issued by
such bank, trust company or industrial bank pursuant to the provisions
of this section in an aggregate unpaid principal and interest amount
equal to the assessment so paid.
(j) Not less than thirty nor more than sixty days after notice of
assessment is given to stockholders as provided in paragraph (i) of this
subdivision, the superintendent shall, if the plan so provides, cause
any assets of such bank, trust company or industrial bank which are to
be liquidated for the pro rata benefit of certificate holders, to be set
aside in a special account upon the books of such bank, trust company or
industrial bank or transferred to a separate corporation.
(k) Upon the completion of the acts required to be done pursuant to
paragraph (i) and paragraph (j) of this subdivision and not more than
sixty days after notice of assessment is given to stockholders as
provided in paragraph (i) of this subdivision, the superintendent shall
execute in triplicate a certificate declaring such plan to be effective
and stating the amount of capital stock which such bank, trust company
or industrial bank shall thereafter have, the classes, if any, into
which such capital stock shall be divided, the number of shares in each
class and the par value of each such share. The amount of capital stock
stated in such certificate shall be not less than the amount of capital
stock required to be issued to certificate holders pursuant to such
plan, plus the amount of capital stock required, pursuant to paragraph
(i) of this subdivision, to be issued to stockholders who shall have
paid the full amount of the assessments levied pursuant to such
paragraph (i). The amount of capital stock, the number of shares and
the par value of each such share as stated in such certificate shall be
the amount of capital stock, the number of shares and the par value
thereof which such bank, trust company or industrial bank shall
thereafter be authorized to have, provided that nothing herein contained
shall be deemed to limit the power of any such bank, trust company or
industrial bank subsequently to change the amount of its capital stock,
the number of its shares or the par value of its shares pursuant to
subdivision two of section eight thousand one. One of such triplicate
certificates shall be transmitted forthwith by the superintendent to
such bank, trust company or industrial bank, another shall be filed in
the office of the superintendent and the third shall be filed by the
superintendent in the office of the clerk of the county in which is
located the principal office of such bank, trust company or industrial
bank. Upon such filing in the office of the county clerk, the plan shall
become effective and all certificates theretofore issued by such bank,
trust company or industrial bank pursuant to the provisions of this
section shall be null and void and shall not be deemed to be outstanding
for any purpose. Thereupon such bank, trust company or industrial bank
shall issue and make available to the holders of such certificates
shares of stock or debentures or both of such bank, trust company or
industrial bank, and if the plan so provides, evidences of participation
in the assets aside in a special account or stock or other securities or
both of a separate corporation, in the proportions and amounts specified
in such plan.
(l) Within sixty days after a plan pursuant to this subdivision has
become effective with respect to any bank, trust company or industrial
bank, there shall be called in accordance with its by-laws a meeting of
its stockholders who shall elect directors who shall succeed the former
directors. The directors so elected shall elect officers who shall
succeed the former officers. Directors in office at the date of such
meeting may be elected at such meeting to succeed themselves and the
directors elected at such meeting may elect officers then serving to
succeed themselves. Notwithstanding the requirements as to ownership of
capital stock contained in section one hundred sixteen or section three
hundred three of this chapter, the directors of such bank, trust company
or industrial bank holding office at the time that such plan becomes
effective may continue to hold office as directors, until their
successors are elected and shall have qualified.
(m) The supreme court in and for the county in which is located the
principal office of such bank, trust company or industrial bank is
hereby vested with jurisdiction and authority to determine the fairness
of, and to approve or disapprove, any plan, or modification or
modifications thereof, which may be promulgated hereunder and to
determine the fairness of, and to approve or disapprove, the terms and
conditions of the issuance and exchange of stock or other securities, or
both, of any corporation for certificates issued pursuant to the
provisions of this section and to make such orders and do such other
things as may be required by this subdivision or as may be necessary or
convenient to carry out the purposes hereof.
9. If there be in article fifteen of this chapter a provision which
conflicts with any provision of this section six hundred nine, the
provision of this section six hundred nine shall prevail, and the
conflicting provision of article fifteen shall not apply in such case.
If there be in article fifteen a provision relating to a matter embraced
in this section six hundred nine, but not in conflict therewith, both
provisions shall apply.
S 610. Resumption of business in accordance with plan of
reorganization. The superintendent, in his discretion, may permit a
corporation of which he has taken possession or which is operating on a
restricted basis pursuant to regulations promulgated by duly constituted
authority, to resume business in accordance with a plan of
reorganization under which depositors and other creditors will receive
less than the full amount of their claims and/or in partial payment
thereof will receive certificates of beneficial interest in certain
segregated assets and/or stock of such corporation, and under which
stockholders will contribute their shares of capital stock and/or money
in lieu of assessments upon such stock. In any such case in which the
superintendent permits resumption of business pursuant to such a plan of
reorganization, all depositors and creditors and stockholders of any
such corporation, whether or not they shall have consented to such plan
of reorganization, shall be fully and in all respects subject to and
bound by its provisions, and claims of all depositors and other
creditors shall be treated as if they had consented to such plan;
provided, however, that the superintendent shall not permit a
corporation to resume business in accordance with such a plan of
reorganization unless it has been shown to his satisfaction that (1)
such plan is fair and equitable to all depositors and other creditors
and stockholders and is in the public interest and (2) that depositors
and other creditors, representing at least eighty per centum in amount
of its total deposits and other liabilities, exclusive of the claims of
depositors and other creditors which will be satisfied in full under the
plan of reorganization, and stockholders owning at least two-thirds of
its outstanding capital stock, as shown by the books of the corporation,
have consented in writing to such plan; provided further, that
permission to resume business under any such plan of reorganization
shall be granted by the superintendent only upon an order of the supreme
court in and for the county in which the principal office of such
corporation is located. The application for an order of the supreme
court pursuant to this section shall be made upon an order to show cause
which shall provide that notice thereof, of a kind which the court deems
to be adequate and proper, be given to depositors, creditors and
stockholders of such corporation.
S 611. Special deputies; assistants; counsel and other employees. The
superintendent may, by certificate, under his hand and the official seal
of the department, appoint one or more special deputy superintendents as
agent or agents to assist him in liquidating the business and affairs of
any banking organization in his possession. The superintendent shall
file such certificate in his office and shall cause a certified copy
thereof to be filed with the supreme court in the judicial district in
which the principal office of such banking organization is located. He
may delegate such special deputy superintendents to perform such duties
connected with such liquidation as he may deem proper. The
superintendent may employ such counsel and expert assistants, without
being subject to the requirements of section one hundred twelve of the
state finance law or to the prior approval of any other state agency,
under such titles as he shall assign to them and may retain such of the
officers or employees of such banking organization as he may deem
necessary in the liquidation and distribution of its assets. He shall
require such security as he may deem proper from his agents and
assistants appointed pursuant to the provisions of this section.
S 611-a. Appointment of single judge. When the superintendent has
taken possession of and is liquidating the business and property in this
state of any banking organization under the provisions of this article,
the superintendent shall be entitled to the appointment of a single
judge to supervise the liquidation upon request to the administrative
judge of the supreme court in the judicial district in which the
principal office of such banking organization is located. Such judge
shall have the power to order expedited or simplified procedures or
order a reference wherever necessary to resolve a matter in such
liquidation.
S 612. Certificates to be recorded and received in evidence. The
superintendent, deputy superintendents, and the special deputy
superintendents designated under the provisions of section six hundred
eleven of this chapter, are hereby authorized to subscribe and
acknowledge written statements reciting determinations made or acts
performed pursuant to the powers vested in and duties imposed upon the
superintendent pursuant to the terms and provisions of this chapter.
Every paper so executed and acknowledged by the superintendent or a
deputy superintendent or a special deputy superintendent may be recorded
in any proper recording office in the same manner and with the same
effect as a deed regularly acknowledged and, whether or not so recorded,
shall be received in evidence in any action or proceeding now pending or
hereafter commenced, and shall be presumptive evidence of the facts
therein stated.
Any statement, similarly executed and acknowledged, setting forth an
extract from a book, record or document of any banking organization in
the possession of the superintendent or any other book, record or
document relating to the liquidation thereof, shall be received in
evidence in any action or proceeding now pending or hereafter commenced
with the same effect as the original book, record or document.
S 612-a. Payment of wages. All wages actually owing to the employees
of a banking organization in the possession of the superintendent for
services rendered within three months prior to the date when possession
was taken, not exceeding two thousand dollars to each employee, shall be
paid prior to the payment of every other debt or claim, and in the
discretion of the superintendent may be paid as soon as practicable
after taking possession, except that at all times the superintendent
shall reserve such funds as will in his opinion be sufficient for the
expenses of administration.
S 613. Payment by superintendent of expenses of liquidation. The
superintendent shall pay out of the funds in his hands of any banking
organization of which he is in possession, all expenses of liquidation,
subject to the approval of the supreme court in the judicial district in
which the principal office of such banking organization was located. The
application for an order of the supreme court pursuant to this section
shall be made upon an order to show cause which shall provide that
notice thereof to the depositors and creditors, and to the stockholders
or shareholders, if any, of such banking organization be published once
in each week for two consecutive weeks in a newspaper of general
circulation in the county in which the principal office of such banking
organization was located. Such order to show cause shall also be served
upon such banking organization in such manner as the court, in such
order to show cause, may direct. The hearing upon such application shall
be held not less than ten days after the first publication of such
notice. An order approving the final expenses of liquidation of a
corporate banking organization may, in a proper case, and if the
petition complies with the requirements of subdivision three of section
six hundred twenty-seven of this article, include a provision declaring
the banking organization dissolved and its corporate existence
terminated. The supreme court shall not upon any application under this
section increase the compensation of special deputy superintendents,
assistants, counsel or other employees over the amount fixed by the
superintendent, or direct the superintendent to make any expenditure not
approved by him.
S 614. Obtaining possession of pleadings, et cetera, in actions
against which attorneys` liens are asserted. When the superintendent is
in possession of any banking organization, and attorneys` liens are
asserted by attorneys of such banking organization against any causes of
action to which such banking organization is a party, or against
pleadings or other papers in the possession of such attorneys relating
to such causes of action, or if such liens are asserted against any
evidences of title to any assets or against any of the assets of such
banking organization then in the possession of such attorneys, the
superintendent may institute special proceedings and petition the court
to fix and determine the amount of such liens. Such proceedings shall be
instituted in the county in which the principal office of such banking
organization is located. Upon application of the superintendent and upon
notice to such attorneys to be prescribed by the court, the court may by
order prior to final order in such proceeding direct such attorneys to
deliver to the superintendent all property of such banking organization,
against which such liens are asserted, together with such consents to
substitution of attorneys as the court may direct, upon the
superintendent furnishing security to such attorneys in the manner and
to an amount that may be fixed by the court.
S 615. On taking possession, superintendent shall notify those holding
assets; effect of notification; turnover of assets and payment of debts
owed to the banking organization. When the superintendent shall take
possession of the property and business of any banking organization:
1. The superintendent shall forthwith give notice of such fact to all
corporations, unincorporated associations, partnerships, governmental
entities and other entities and individuals known to him to hold any
assets of such banking organization. No corporation, unincorporated
association, partnership, governmental entity or other entity or
individual having notice or knowledge that the superintendent has taken
possession of such banking organization, shall have a lien or charge for
any payment, advance or clearance thereafter made against any of the
assets of such banking organization for liability thereafter incurred.
2. Upon the written demand of the superintendent, any corporation,
unincorporated association, partnership, governmental entity or other
entity or individual holding assets of such banking organization shall
deliver such assets to the superintendent and shall thereupon be
discharged from liability with respect to any claim upon such assets;
provided, however that such demand shall not affect the right of a
secured creditor with a perfected security interest, or other valid lien
or security interest enforceable against third parties, to retain
collateral, including any right of such secured creditor under any
security arrangement related to a qualified financial contract, as
defined in section six hundred eighteen-a of this article to retain
collateral and apply such collateral in accordance with paragraph (d) of
subdivision two of section six hundred eighteen-a of this article.
Nothing in this section shall affect any right of setoff permitted under
applicable law; provided, however, that in connection with the
liquidation of a branch or agency of a foreign banking corporation
pursuant to this article, no entity or individual may set off the
business and property in this state of such foreign banking corporation
described in subparagraph one of paragraph (c) of subdivision four of
section six hundred six of this article against liabilities of such
foreign banking corporation other than those that arise out of
transactions had by such entity or individual with such branch or agency
(which liabilities shall be deemed to include in the case of qualified
financial contracts the lesser of the two amounts calculated with
respect to any such qualified financial contract pursuant to paragraph
(c) of subdivision two of section six hundred eighteen-a of this
article) and provided that such setoff is otherwise permissible under
applicable law.
S 616. Inventory of assets; where filed. After the superintendent
shall have taken possession of and shall have determined to liquidate
the property and business of any banking organization, he shall make in
duplicate an inventory of the assets of such banking organization. He
shall file one copy of such inventory in his office and shall cause one
copy to be filed with the supreme court in the judicial district in
which the principal office of such banking organization is located.
S 617. Disposition of property held as bailee, or depositary; opening
of safe deposit boxes; disposal of contents. 1. The superintendent may,
after he has taken possession of any banking organization, cause to be
mailed to each person claiming to be, or appearing upon the books of
such banking organization to be
(1) the owner of any personal property in the custody or possession of
such banking organization as bailee or depositary for hire or otherwise,
including the contents of any safe, vault or box theretofore opened for
non-payment of rental in accordance with the provisions of this chapter,
or
(2) the lessee of any safe, vault or box, a notice in writing directed
by registered mail to such person at his last address as the same
appears on the books of such banking organization or at his last known
address if no address appears on such books, notifying such person to
remove all such property or the contents of any such safe, vault or box,
within a period stated in said notice, which period shall be not less
than sixty days from the date of such notice, and further notifying such
person of the terms and provisions of this section. The contract of
bailment or of deposit for hire, or lease of safe, vault or box, if any,
between the person to whom such notice is mailed and such banking
organization shall cease and determine upon the date for removal fixed
in such notice. Such person shall have a claim against such banking
organization for the amount of the unearned rent or charges, if any,
paid by such person from the date fixed in such notice, if the property
or contents is removed on or before such date, or from the date of
actual removal, if the property or contents is removed after such date.
As used herein the phrase "personal property in the custody or
possession of such banking organization as bailee or depositary for hire
or otherwise" shall include, without limitation, securities, whether
held in custody directly or in book-entry form by such banking
organization, its nominee, subcustodian, clearing corporation or similar
entity.
2. If such property or contents shall not be removed, and all rent or
storage and other charges theretofore accrued, if any, shall not be
paid, within the time fixed by such notice, the superintendent may cause
such property to be inventoried, or such safe, vault or box, or any
package, parcel or receptacle in the custody or possession of such
banking organization as bailee or depositary for hire or otherwise, to
be opened and the contents, if any, to be removed and inventoried, in
his presence or in the presence of a deputy superintendent, a special
deputy superintendent, or an examiner and of a notary public, not an
officer or employee of such banking organization or of the banking
department. Such property or contents shall thereupon be sealed up by
such notary public in a package distinctly marked by him with the name
of the person in whose name such property or such safe, vault, box,
package, parcel or receptacle stands upon the books of such banking
organization, and a copy of the inventory of the property therein shall
be certified and attached thereto by such notary public. Such package
may be kept by the superintendent in such place as he may determine at
the expense and risk of the person in whose name it stands until
delivered to such person or until sold, destroyed or otherwise disposed
of as hereinafter provided. Such package may, pending final disposition
of its contents, be opened by the superintendent, a deputy
superintendent, special deputy superintendent or examiner, from time to
time for inspection or appraisal, or to enable the superintendent to
exercise any of the powers conferred or duties imposed upon him by this
article. Whenever such package is opened, the superintendent, deputy
superintendent, special deputy superintendent or examiner, shall endorse
on the outside of said package the date of opening and re-sealing, and
shall prepare an affidavit which shall be attached thereto, showing the
reason for opening and the articles, if any, removed therefrom, or
placed or replaced therein.
3. At any time prior to the sale, destruction or other disposition of
the contents thereof, the person in whose name such package stands may
require the delivery thereof upon payment of all rental or storage
charges accrued, and all other charges or expenses paid or incurred to
the date of delivery with respect to such package or the contents
thereof, including the cost of inventorying or of opening and
inventorying, the fees of the notary public, the cost of preparing and
mailing the notice, and advertising, if any. In case the superintendent
is in doubt concerning the person entitled to receive such package, or
there are conflicting claims thereto, he may require of the claimant an
order of the supreme court authorizing and directing the delivery
thereof, but for any delivery or transfer made by him in good faith to
the claimant appearing from the records in his office to be entitled
thereto, he shall be held harmless and shall not be liable to any
subsequent claimant. If the principal of, or interest, income, or
dividends on any bonds, stock certificates, promissory notes, choses in
action or other securities contained in such package, is or becomes due
and payable while it is in the possession of the superintendent, he may
at his election collect such principal, interest, income or dividends,
and from the proceeds thereof may deduct all such sums due for rental
and other charges, until the time of such collection. The balance, if
any, of the amount or amounts so collected shall be disposed of by the
superintendent as hereafter in subdivision five provided.
4. After the expiration of one year from the time of mailing the
notice in subdivision one hereof described, the superintendent may apply
to the supreme court for an order authorizing him to sell, destroy or
otherwise dispose of the contents of such package. In a proper case, the
court shall make such order upon such terms and conditions as justice
may require. The application for an order of the supreme court pursuant
to this subdivision shall be made upon an order to show cause, which
shall provide that notice thereof to the person in whose name such
package stands and to any other person claiming or appearing to have an
interest therein, shall be published, mailed or given in such other
manner as the court may prescribe. Whenever, pursuant to the provisions
of this subdivision, the superintendent is given the power to sell the
contents of any package, such power to sell shall be deemed a power to
sell in satisfaction of a lien for non-payment of rental or storage
charges accrued, and all other charges and expenses paid or incurred to
the date of sale with respect to such package and the contents thereof,
including the charges and expenses described in subdivision three
hereof. Such power to sell, or the power to destroy or otherwise dispose
of, when authorized pursuant to the provisions of this subdivision,
shall be deemed to include the power to sell, destroy or otherwise
dispose of, as the case may be, any bonds, stock certificates,
promissory notes, choses in action, or other securities, and any other
tangible or intangible property contained in any package, regardless of
whether or not it shall appear from such securities or properties that
the person in whose name the package stands, possesses title to or
interest in such securities or other properties, or power to transfer
such title or interest, and any sale of such securities or properties,
pursuant to this subdivision, shall vest good title thereto in the
purchaser thereof.
5. From the proceeds of any sale, the superintendent shall deduct all
rental or storage charges accrued, and all other charges and expenses
paid or incurred to the date of sale, including the charges and expenses
described in subdivision three hereof, and the expenses of sale. The
balance of such proceeds, if any, shall be credited to the person in
whose name such package stood and shall be paid over to such person, his
assignee or legal representative on satisfactory evidence of identity.
At the expiration of six months after the completion of the liquidation
of such banking organization, the superintendent shall deposit any
unclaimed amounts derived from such sale, as provided in article two of
this chapter.
6. The provisions of this section do not affect or preclude any other
remedy by action or otherwise for the enforcement of the claims or
rights of the superintendent, or of a banking organization of which he
is in possession, against the person in whose name any property, or any
safe, vault, box, package, parcel or receptacle stands, nor affect, nor
bar the right of the superintendent or the banking organization to
recover, before sale, any debt or claim due him or it, or, after sale,
so much of the debt or claim as shall not be paid by the proceeds of the
sale.
S 618. Liquidation and conservation of assets; compromising debts and
claims; deposit of moneys collected; preference; superintendent, as
liquidator, authorized to borrow on and pledge assets of banks. 1. (a)
The superintendent is authorized, upon taking possession of any banking
organization, to liquidate the affairs thereof and to do all acts and to
make such expenditures as in his or her judgment are necessary to
conserve its assets and business. The superintendent shall proceed to
collect the debts due. The superintendent may, upon an order of the
supreme court (unless such order is not required pursuant to the
provisions of paragraph (b), (c) or (d) of this subdivision), (i) sell,
assign, compromise, or otherwise dispose of all bad or doubtful debts
held by such banking organization, (ii) compromise claims against such
banking organization, other than deposit claims, and (iii) sell or
otherwise dispose of all or any of the real and personal property of
such banking organization wherever situated. In case any of the real
property so sold is located in a county in this state other than a
county in which the application to the court for leave to sell is made,
the superintendent shall cause a certified copy of such order to be
filed in the office of the clerk of the county in which such real
property is located.
(b) The superintendent may sell, assign, compromise or otherwise
dispose of any bad or doubtful debt held by such banking organization
the value of which does not exceed fifty thousand dollars upon such
terms as he or she may deem for the best interests of such banking
organization without obtaining the approval of the court. For purposes
of this paragraph, the value of any such bad or doubtful debt shall be
the current value thereof as determined by the superintendent in good
faith.
(c) The superintendent may, when the amount proposed to be paid by the
superintendent in compromise does not exceed fifty thousand dollars,
compromise any claim against such banking organization, other than any
deposit claim, upon such terms as he or she may deem for the best
interests of such banking organization without obtaining the approval of
the court.
(d) The superintendent may sell or otherwise dispose of any personal
property of such banking organization (other than bad or doubtful debts
subject to the provisions of paragraph (b) of this subdivision) the
value of which does not exceed fifty thousand dollars upon such terms as
he or she may deem for the best interests of such banking organization
without obtaining the approval of the court. For purposes of this
paragraph, the value of any such personal property of such banking
organization shall be (i) in the case of any single class of a security,
or any commodity, or other property or claim that has a readily
ascertainable market value, such market value, and (ii) in any other
case, the current value thereof as determined by the superintendent in
good faith.
2. The moneys collected by the superintendent shall be: (a) Deposited
on demand, time or otherwise in one or more banks, savings banks or
trust companies and, in case of the insolvency or voluntary or
involuntary liquidation of the depositary, such deposits shall be
entitled to priority of payment on an equality with any other priority
given by this chapter;
(b) Deposited on demand, time or otherwise in one or more national
banks with its principal office located in this state and with total
assets exceeding five billion dollars; or
(c) Invested in obligations of the United States, or those for which
the full faith and credit of the United States is pledged to provide for
the payment of interest and principal.
3. Upon an order of the supreme court in and for the county in which
the principal office of such banking organization is located, the
superintendent is authorized to borrow money and to execute, acknowledge
and deliver notes or other evidences of indebtedness therefor and to
secure the repayment thereof by the mortgage, pledge, assignment in
trust or hypothecation of any or all of the property whether real,
personal or mixed of such banking organization. Money may be so borrowed
for any one or more of the following purposes:
(a) Facilitating liquidation;
(b) Protecting or preserving the assets in his possession;
(c) Declaring and paying dividends to depositors and other creditors;
(d) Providing for the expenses of administration and liquidation;
(e) Aiding in the reopening or reorganization of such banking
organization;
(f) Aiding in the merger or consolidation of any one or more of such
banking organizations which are corporations;
(g) Aiding in the sale of all of the assets of any such banking
organization.
The superintendent with the aforesaid order of the supreme court shall
have power to take any and all other action necessary and proper to
consummate any such loans and to provide for the repayment thereof.
The superintendent shall be under no obligation personally or in his
official capacity to repay any loan made pursuant to this subdivision.
The obligation for the repayment of any such loan shall be solely the
obligation of the banking organization receiving the benefit of such
loan.
S 618-a. Repudiation of contracts. 1. Except as otherwise provided in
this section, when the superintendent has taken possession of the
business and property in this state of a banking organization, unless
the federal regulator or insurer is appointed as receiver or liquidator,
the superintendent may assume or repudiate any contract, including an
unexpired lease, of the banking organization: (a) to which such banking
organization is a party, (b) the performance of which the
superintendent, in the superintendent`s discretion, determines to be
burdensome, and (c) the repudiation of which the superintendent
determines, in the superintendent`s discretion, will promote the orderly
administration of the banking organization`s affairs. After the
expiration of ninety days from the date that the superintendent takes
possession of the banking organization, any party to a contract with the
banking organization being liquidated may demand in writing that the
superintendent assume or repudiate such contract. If the superintendent
has not assumed or repudiated the contract within fifteen calendar days
from the date of receipt of the demand by the superintendent, the
affected party may bring an action in the supreme court in the judicial
district in which the principal office of the banking organization is
located to obtain an order requiring the superintendent to decide
whether to assume or repudiate that contract. If the superintendent has
not assumed or repudiated a contract by one month before the last date
for filing claims against the banking organization being liquidated
pursuant to section six hundred twenty of this article, such contract
shall be deemed repudiated. Notwithstanding the foregoing, with respect
to an unexpired lease of the banking organization for the rental of real
property under which the banking organization was a lessee, if th