§ 7-1-1129 — Possession by department; receivership proceedings; venue; contesting decision; liquidation and transfer of assets

Georgia § 7-1-1129

• Jurisdiction: Georgia
• Title: 7

Text

(a) If the department finds that any of the factors set forth in Code Section 7-1-150 or 7-1-1126 are true with respect to a foreign bank licensed to establish and maintain a Georgia state branch or Georgia state agency, the department may by order of the commissioner immediately take possession of the property and business of the foreign bank in this state if that action is necessary or desirable for the protection of the interests of the depositors and creditors of the foreign bank's business in this state or for the protection of the public. The department shall retain possession until the foreign bank resumes business in this state or is finally liquidated, except that the department may permit the foreign bank to resume business in this state on such conditions as the department requires. An order issued under this Code section shall be served on the foreign bank in the manner required by subsection (a) of Code Section 7-1-1127 . (b) As soon as practicable after taking possession of the property and business of a foreign bank pursuant to subsection (a) of this Code section, the department shall initiate a receivership proceeding by filing a copy of the order issued under this Code section in the Superior Court of DeKalb County to be governed by Part 7 of Article 1 of this chapter as if the foreign bank were a Georgia state bank, except as otherwise provided by this Code section. Notwithstanding the priorities established by Part 7 of Article 1 of this chapter, the depositors and creditors of the Georgia state branch or Georgia state agency arising out of transactions with and recorded on the books of the Georgia state branch or Georgia state agency have an absolute preference and priority over the creditors of the foreign bank's offices located outside this state. (c) An action initiated that seeks to directly or indirectly affect the assets of the Georgia state branch or Georgia state agency is considered to be an intervention in the receivership proceeding. Venue for an action instituted to effect, contest, or otherwise intervene in the liquidation of a Georgia state branch or Georgia state agency is in DeKalb County. (d) The foreign bank may contest the department's actions as provided in this subsection. On or before the tenth day after the date the department has taken possession of the property and business of a foreign bank pursuant to subsection (a) of this Code section, the foreign bank, acting through a majority of its directors, may intervene in the action filed by the commissioner to challenge the department's closing of the foreign bank's Georgia state branch or Georgia state agency and to enjoin the department or other receiver from liquidating its assets. The court may issue an injunction restraining the department or other receiver from liquidating the foreign bank's assets pending a resolution of the merits of the action. The department or other receiver shall comply with the restraining order but may petition the court for permission to liquidate assets as necessary to prevent their loss or diminution pending the outcome of the injunction. The department or other receiver shall not be required to post bond. The court shall hear such action as quickly as possible and shall give it priority over other business. The foreign bank or the commissioner or other receiver may appeal the court's judgment as in other civil cases, except that the commissioner or other receiver shall retain all seized foreign bank assets pending a final appellate court order even if the commissioner does not prevail in the superior court. If the department prevails in the superior court, liquidation of the assets of the Georgia state branch or Georgia state agency may proceed unless the superior court or appellate court orders otherwise. If liquidation is enjoined or stayed pending appeal, the superior court retains jurisdiction to permit liquidation of assets as necessary to prevent their loss or diminution pending the outcome of the appeal. (e) After the commissioner or other receiver has completed the liquidation of the property and business of a foreign bank, the commissioner or other receiver shall transfer any remaining assets to the foreign bank in accordance with the court's orders, except that: (1) If the foreign bank has an office in another state of the United States that is in liquidation and the assets of the office appear to be insufficient to pay in full the creditors of that office, the court shall order the commissioner or other receiver to transfer to the liquidator of that office the amount of the remaining assets that appears to be necessary to cover the insufficiency; or (2) If the foreign bank has two or more such offices in liquidation and the amount of remaining assets is less than the aggregate amount of insufficiencies with respect to such offices, the court shall order the commissioner or other receiver to distribute the remaining assets among the liquidators of the offices in the manner the court finds equitable.

Legislative History

Added by 2023 Ga. Laws 348,§ 48, eff. 7/1/2023.