§ 6-1201. Voluntary liquidation and dissolution.

A.  Voluntary liquidation - Approval of stockholders and Banking Board.  With the approval of the Board, a state bank may liquidate and dissolve.  The Board shall grant such approval if it appears that the proposal to liquidate and dissolve has been approved by a majority vote of the outstanding voting stock at a meeting called for that purpose, or if all shareholders entitled to vote thereon shall consent in writing, and that after giving effect to any proposed purchase of the assets of the bank and assumption of its liabilities as provided for in Section 1109 of this title the state bank will be solvent and will have sufficient liquid assets to pay off any remaining depositors and creditors immediately.

B.  Cessation of business - Notice of liquidation - Safe deposit boxes - Distribution.

1.  Upon approval by the Board, the bank shall forthwith cease to do business, shall have only the powers necessary to effect an orderly liquidation and shall proceed to pay its remaining depositors and creditors and to wind up its affairs.

2.  Within thirty (30) days of the approval, the state bank shall send a notice of liquidation by mail to each depositor, creditor, person interested in funds held as a fiduciary, lessee of a safe deposit box and bailor of property at the address of such person as shown on the books of the bank; provided, however, in the case of all depositors, creditors, loan customers or lessees of safe deposit boxes whose deposits, accounts or other contractual arrangements with the state bank have been purchased or assumed as provided for in Section 1109 of this title, a notice of purchase and assumption shall be sent by the purchasing and assuming bank in lieu of a notice of liquidation by the liquidating state bank.  The notice prepared by the state bank shall also be posted conspicuously on the premises of the bank and shall be given such publication as the Commissioner may require.  The purchasing and assuming bank or the liquidating bank, as applicable, shall send with each notice a statement of the amount shown on the books to be the claim or liability of the depositor, creditor or other customer.  Each such notice shall demand that claims of depositors and creditors, or corrected statements of amounts owed by the customer, if the amount claimed or owed differs from that stated in the notice, be filed with the notifying bank before a specified date not earlier than sixty (60) days thereafter in accordance with the procedure prescribed in the notice.  The notice prepared by the liquidating bank shall also demand that property held by the bank as bailee or in a safe deposit box not taken over by a purchasing and assuming bank be withdrawn by the person entitled thereto.

3.  As soon after approval as may be practicable the state bank shall resign all fiduciary positions and take such action as may be necessary to settle its fiduciary accounts, and the manner of succession of trust powers and successor trustees shall follow the same procedure as set out in Section 1018 of this Code.

4.  Any safe deposit boxes which have not been taken over by a purchasing and assuming bank, and the contents of which have not been removed within thirty (30) days after demand, shall be opened.  Sealed packages containing the contents of such box, with a certificate of inventory of contents, together with any other unclaimed property held by the bank as bailee and certified inventories thereof, shall be transferred to the Commissioner, who shall administer them in accordance with the provisions of the Uniform Unclaimed Property Act (1981).

5.  The approval of an application for liquidation shall not impair the right of a depositor or creditor whose account has not been unconditionally assumed by a purchasing and assuming bank to be paid in full by the liquidating bank, and all lawful claims of remaining creditors and depositors of the liquidating bank shall promptly be paid.  The unearned portion of the rental of a safe deposit box not taken over by a purchasing and assuming bank shall be returned to the lessee.

6.  Any assets remaining after the discharge of or adequate provision for all obligations shall be distributed to the stockholders in accordance with their respective interests.  No such distribution shall be made before all claims of depositors and creditors have been:

a.assumed as provided for in Section 1109 of this title,

b.provided for by the establishment of a reserve fund in an amount approved by the Commissioner,

c.paid by the liquidating bank, or

d.in the case of any disputed claim, provided for by transmittal to the Commissioner of a sum adequate to meet any liability that may be judicially determined.

C.  Unclaimed funds.  Any unclaimed distribution to a stockholder or depositor shall be held until ninety (90) days after the final distribution and then transmitted to the Commissioner who shall administer them in accordance with the provisions of the Uniform Unclaimed Property Act (1981).

D.  Possession and liquidation by Commissioner.  If the Commissioner finds that assets will be insufficient for the full discharge of all obligations or that completion of the liquidation has been unduly delayed, the Commissioner may take possession and complete the liquidation in the manner provided in this Code for involuntary liquidations.

E.  Cancellation.  The Commissioner may require reports of the progress of liquidation.  Whenever the Commissioner is satisfied that the liquidation has been properly completed, the Commissioner shall enter an order of dissolution and recommend to the Secretary of State the bank's certificate of incorporation be canceled, upon receipt of which the Secretary of State shall cancel such certificate.

Added by Laws 1965, c. 161, § 1201.  Amended by Laws 1968, c. 93, § 13, emerg. eff. April 1, 1968; Laws 1986, c. 316, § 10, emerg. eff. June 24, 1986; Laws 1991, c. 331, § 45, eff. Sept. 1, 1991; Laws 1997, c. 111, § 93, eff. July 1, 1997.