2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 6.1. SAVINGS BANKS CHAPTER 15. CONVERSION OF A SAVINGS BANK TO A BANK OR TRUST
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IC 28-6.1-15
Chapter 15. Conversion of a Savings Bank to a Bank or Trust
IC 28-6.1-15-1
Application of chapter
Sec. 1. This chapter applies only to a savings bank organized,
reorganized, or operating under IC 28-6 (before its repeal) before
January 1, 1993.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-2
Effective date of conversion
Sec. 2. As used in this chapter, "effective date of conversion"
refers to the date that the savings bank has complied with section 9
of this chapter.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-3
Conversion permitted
Sec. 3. A savings bank may convert into a state bank or trust
company under this chapter.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-4
Resolutions of conversion
Sec. 4. (a) A conversion of a savings bank under this chapter must
be proposed by the board of the savings bank by a resolution of
conversion adopted by the affirmative vote of at least two-thirds
(2/3) of the then qualified and acting trustees.
(b) The resolution of conversion must include the following
information:
(1) The proposed articles of incorporation of the bank or trust
company. The proposed articles of incorporation shall:
(A) insofar as applicable, conform with the provisions of
IC 28-12-2; and
(B) set forth the following:
(i) The plan of conversion.
(ii) The manner in which the shares of the capital stock of
the proposed bank or trust company will be subscribed for.
The provisions of IC 28-12-11, IC 28-13-1, IC 28-13-2,
and IC 28-13-3 are applicable with respect to the capital
requirements and the par value and incidents of shares of
capital stock of the proposed bank or trust company.
(2) The proposed capital stock and surplus.
(3) The proposed bylaws.
(4) Other information required by the department.
(c) The savings bank must submit to the department three (3)
copies of the resolution of conversion, including the proposed
articles of incorporation, certified by the president and attested by the
secretary of the savings bank.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-5
Terms and conditions of conversions; rights of depositors
Sec. 5. The terms and conditions of conversion and the rights of
the depositors under the conversion are as follows:
(1) A depositor may subscribe to the capital stock of the bank
or trust company:
(A) in an amount equal to part or all of the depositor's pro
rata interest in the surplus of the savings bank;
(B) in an additional amount equal to part or all of the
depositor's savings deposits in the savings bank; and
(C) in other additional amounts desired by the depositor.
(2) If the aggregate subscriptions received from depositors
under subdivision (1) exceed the proposed capital of the bank
or trust company:
(A) the proposed capital may be increased to the extent
required to eliminate the oversubscription by amending the
resolution of conversion and the proposed articles of
incorporation of the bank or trust company; or
(B) the subscriptions of the depositors may be ratably
reduced to the extent required to eliminate the
oversubscription.
(3) If the aggregate subscriptions do not amount to a full
subscription to the capital stock of the bank or trust company,
the trustees may open the subscription list to the general public
in order to eliminate the undersubscription.
(4) Upon conversion, all savings deposits in the savings bank,
except those allocated to subscriptions by depositors under
subdivision (1)(C):
(A) become savings deposits in the bank or trust company;
and
(B) are subject to the withdrawal restrictions applicable to
savings deposits in banks or trust companies organized under
IC 28-1.
(5) The rights of depositors with respect to their pro rata
interests in the surplus of the savings bank are as follows:
(A) Upon conversion, the amount of the depositors' pro rata
interests in the surplus of the savings bank that have not
been allocated to subscriptions by the depositors under
subdivision (1)(A) shall, at the election of those depositors,
be paid to the depositors in cash or credited to their savings
deposits in the bank or trust company. The pro rata interests
of depositors who fail to make an election with respect to the
distribution of the interests before the effective date of
conversion shall be credited to the savings deposits of the
depositors in the bank or trust company.
(B) The value of each depositor's pro rata interest in the
surplus of the savings bank shall be computed by
multiplying the amount in the surplus, as of the date of the
resolution of conversion, by a percentage determined by
dividing the total amount of savings deposits on the date of
the resolution of conversion into the amount of each
depositor's savings deposits on that date. Each interest shall
be increased or decreased by applying the same percentage
multiple to the amount of any increase or decrease in the
surplus occurring within the period of time between the date
of the resolution of conversion and the effective date of
conversion. For purposes of this section, each depositor of
the savings bank shall be considered a depositor as of the
date of the resolution of conversion. Depositors of the
savings bank who withdrew all of their deposits before the
date of the resolution of conversion have no right or claim to
any of the savings bank's surplus.
(C) Subscriptions, payments in cash, or savings deposit
credits made under this section constitute satisfaction in full
of each depositor's pro rata interest in the surplus of the
savings bank.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-6
Approval or disapproval of resolutions of conversion by
department
Sec. 6. (a) The department shall approve or disapprove the
resolution of conversion after first making examinations or
investigations the department considers necessary to determine if the
proposed conversion is fair and in the best interests of the depositors
of the savings bank.
(b) IC 28-1-2-23 and IC 28-11-5 do not apply to a determination
under subsection (a).
(c) If the department approves the resolution of conversion, the
approval shall be evidenced in the manner prescribed in IC 28-12-5.
The approval shall be indicated on the resolution.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-7
Notice to depositors; objections; judicial review
Sec. 7. (a) After the department has given approval to the
resolution of conversion and has returned the resolution of
conversion to the savings bank, the savings bank shall give notice of
the proposed conversion, by mail, to each depositor of record as of
the date of the resolution of conversion. Notice to a depositor shall
be sent to the address of the depositor as shown by the records of the
savings bank. Notice shall also be given by at least ten (10)
consecutive days of publication in a newspaper of general circulation
published in the county in which the savings bank is located.
(b) After notice has been given under this section, a copy of the
resolution of conversion shall be submitted to the circuit court with
jurisdiction in the county in which the savings bank is located.
(c) A depositor of the savings bank aggrieved by the proposed
conversion may, not more than twenty (20) days after submission of
the resolution of conversion with the court file in the court a verified
statement of objection to the proposed conversion. The matter shall
be docketed upon the books of the court, and entitled "In the Matter
of the Conversion of ___________ Savings Bank to __________"
(inserting the names of the savings bank and the successor bank or
trust company). The nature of an objection to the conversion is
limited to the unfairness of the proposed conversion relative to the
rights and interests of the objecting depositor. Without filing
pleadings, the savings bank shall be considered to deny the
objections.
(d) After the twenty (20) day period for filing objections has
expired, the court shall proceed as soon as possible to hear the
evidence and determine the fairness of the proposed conversion
relative to the individual rights and interests of all objecting
depositors. The objecting depositors have the burden of proof.
(e) If the court finds that the proposed conversion is fair with
respect to the rights and interests of the objecting depositors, the
court shall enter an order:
(1) approving the conversion, subject only to the approval by
the secretary of state of the articles of incorporation of the
proposed bank or trust company; and
(2) assessing the costs of the proceeding against the objectors.
(f) If the court finds that the proposed conversion is not fair with
respect to the rights and interests of the objecting depositors, the
court shall enter an order:
(1) enjoining the conversion; and
(2) assessing the costs of the proceeding against the savings
bank.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-8
Approval of articles of incorporation by secretary of state
Sec. 8. (a) If the conversion is approved under section 7 of this
chapter and if the capital stock of the bank or trust company has been
fully subscribed, the trustees of the savings bank shall submit three
(3) copies of the articles of incorporation of the bank or trust
company with the department's approval indicated on the articles to
the secretary of state.
(b) If the secretary of state finds that the articles of incorporation
conform to law, the secretary of state shall, after all fees have been
paid as required by law:
(1) indicate approval on the articles;
(2) keep one (1) copy of the articles for filing; and
(3) send the trustees a certificate of incorporation and two (2)
copies of the articles of incorporation bearing the indicated
approval of the secretary of state.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-9
Prerequisites to doing business
Sec. 9. (a) Except as is incidental to its conversion or to obtaining
payment for shares of its capital stock, the bank or trust company
may not exercise any new power, right, or authority conferred by its
conversion, transact any business, or incur any indebtedness, until
both of the following occur:
(1) One (1) of the copies of the articles of incorporation with
the indicated approval of the secretary of state has been filed
with the county recorder of the county in which the principal
office of the bank or trust company is located.
(2) The amount of the capital stock of the bank or trust
company has been fully paid in.
(b) If the bank or trust company violates this section, its officers
and directors are severally liable for any debts or liabilities of the
bank or trust company arising from the violation.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-10
Effect of conversions
Sec. 10. (a) On the effective date of conversion, the existence of
the savings bank ceases and the existence of the bank or trust
company begins.
(b) On the effective date of conversion, the following apply:
(1) All subscriptions to shares of the capital stock of the bank
or trust company previously received are considered accepted
by the bank or trust company, and the subscribers for those
shares, or their assigns, are considered to be shareholders of the
bank or trust company.
(2) All property, all debts due on whatever account, all choses
in action, and every other interest of or belonging to the
converted savings bank are considered transferred to and vested
in the bank or trust company without further act or deed.
(3) The bank or trust company shall be responsible and liable
for the liabilities and obligations of the converted savings bank.
An existing claim, an action, or a proceeding pending by or
against the converted savings bank may be prosecuted to
judgment as if conversion had not taken place or the bank or
trust company may be substituted in the savings bank's place.
(4) The new bank or trust company has all the rights, privileges,
immunities, and powers and, except as provided in this chapter,
is subject to all the duties, restrictions, penalties, and liabilities
of a bank or trust company organized under IC 28-1.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-11
Continued service of boards
Sec. 11. The board of the savings bank shall serve as the board of
directors of the bank or trust company until the first annual meeting
of the shareholders.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-12
Conformation to limitations
Sec. 12. (a) Subject to subsection (b), a bank or trust company
formed under this chapter shall, within three (3) years from its date
of conversion, conform to the limitations prescribed by IC 28-1-13.
(b) The department may extend the time for the new bank or trust
company to conform to the limitations prescribed by IC 28-1-13 if
the interest of the depositors will be protected and served by an
extension.
As added by P.L.42-1993, SEC.72.
IC 28-6.1-15-13
Powers and duties of department
Sec. 13. This chapter does not limit the powers or duties of the
department under IC 28-1.
As added by P.L.42-1993, SEC.72.
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