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286.5-750 Conservator appointed -- When -- Procedure.
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If the commissioner, as a result of any examination or from any report made to
the commissioner, believes that the public interest may be served by the
appointment of a conservator, applies to a court of general jurisdiction in the
county in which the home office of the association is located for the
appointment of a conservator court may appoint a conservator if it finds that the
association:
(a) Is in an impaired condition, or
(b) Is in violation of an order or injunction, as authorized by this section,
which has become final in that the time to appeal has expired without
appeal, or a final order entered from which there can be no appeal.
The commissioner, the commissioner's examiner, or another person may be
appointed by the court as conservator, and a certified copy of the order of the
court making the appointment shall be evidence thereof. The conservator shall
have the power and authority provided in this subtitle and such other power
and authority as is expressed in the order of the court. The conservator shall
endeavor promptly to remedy the situations complained of in the petition for his
or her appointment.
Within six (6) months of the date of the appointment, or within twelve (12)
months if the court extends the six (6) months' period, the association shall be
returned to its board of directors and thereafter shall be managed and operated
as if no conservator had been appointed, or a receiver shall be appointed as
provided in KRS 286.5-760.
If the commissioner, or examiner, is appointed conservator he or she shall
receive no additional compensation, but if another person is appointed, then
the compensation of the conservator, as determined by the court, shall be paid
by the association.
A certified copy of the order of the court discharging the conservator and
returning such association to its directors shall be sufficient evidence thereof.
Any conservator appointed shall have all the rights, powers, and privileges
possessed by the officers, board of directors, and members of the association.
The conservator shall not retain special counsel or other experts, incur any
expense other than normal operating expenses, or liquidate assets except in
the ordinary course of operations.
The directors and officers shall remain in office and the employees shall
remain in their respective positions, but the conservator may remove any
director, officer, or employee, if the order of removal of a director or officer is
approved in writing by the commissioner.
While the association is in the charge of a conservator, members of such
association shall continue to make payments to the association in accordance
with the terms and conditions of their contracts, and the conservator, in his
discretion, may permit savings account members to withdraw their accounts,
from the association pursuant to the provisions of this subtitle or under such
rules and regulations as the commissioner may prescribe. The conservator
shall have power to accept savings accounts and additions to savings
accounts, but any amounts received by the conservator may be segregated if
the commissioner so orders in writing; if so ordered, such amounts shall not be
subject to offset and shall not be used to liquidate any indebtedness of such
association existing at the time the conservator was appointed for it or any
subsequent indebtedness incurred for the purposes of liquidating the
indebtedness of any such association existing at the time such conservator
was appointed. All expenses of the association during such conservatorship
shall be paid by the association.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 707, effective July 15, 2010. -Amended 1966 Ky. Acts ch. 255, sec. 233, effective June 16, 1966. -- Created
1964 Ky. Acts ch. 138, sec. 54(2) to (10), effective June 18, 1964.
Formerly codified as KRS 289.750.
Legislative Research Commission Note (7/12/2006). In accordance with 2006
Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a
section of the Kentucky Financial Services Code, KRS Chapter 286, and KRS
references within this statute have been adjusted to conform with the 2006
renumbering of that code.
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