2013 New York Consolidated Laws
BNK - Banking
Article 13 - (600 - 634) MERGER; VOLUNTARY DISSOLUTION; SUPERINTENDENT'S TAKING POSSESSION; REORGANIZATION; LIQUIDATION
606 - When superintendent may take possession of banking organization; when possession may be surrendered.

 
    § 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.