§ 58-1-73 — Director in possession

New Mexico § 58-1-73

• Jurisdiction: New Mexico
• Ch. 58: Financial Institutions and Regulations
• Art. 1: Banking Generally

Text

A. The director may take possession of a state bank if, after a hearing or bank stipulation, he finds: (1) its capital is impaired or it is otherwise in an unsound condition; (2) its business is being conducted in an unlawful or unsound manner; (3) it is unable to continue normal operations; or (4) its examination has been obstructed or impeded. B. The director shall take possession by posting upon the premises a notice reciting that he is assuming possession pursuant to the Banking Act and the time, not earlier than the posting of the notice, when his possession shall be deemed to commence. A copy of the notice shall be filed in the district court in the county in which the main office is located. The director shall notify the federal reserve bank of the district of his taking possession of any state bank which is a member of the federal reserve system. C. When the director has taken possession of a state bank, he is vested with the full and exclusive power of management and control, including the power to continue or to discontinue the business, to stop or to limit the payment of its obligations, to employ any necessary assistants, to execute any instrument in the name of the bank, to commence, defend and conduct in its name any action or proceeding in which it may be a party, to terminate his possession by restoring the bank to its board of directors and to reorganize or liquidate the bank in accordance with the Banking Act. As soon as practicable after taking possession, the director shall make an inventory of the assets and file a copy of the inventory with the court in which the notice of possession was filed. D. When the director has taken possession, there shall be a postponement until six months after the commencement of his possession of the date upon which any period of limitation fixed by a statute or agreement would otherwise expire on a claim or right of action of the bank, or upon which an appeal must be taken or a pleading or other document must be filed by the bank in any pending action or proceeding. E. Within thirty days after the director has taken possession, any interested party may file an application for an injunction with the district court of the county in which the principal office of that bank is located for an order vacating the possession. F. If the director decides to liquidate the state bank, he shall give what he deems to be adequate notice to the directors, stockholders, depositors and creditors. Any objection to the liquidation shall be filed with the director within ten days after the notice. The director shall proceed to liquidate the institution unless he finds the action unnecessary to protect depositors. G. If the director decides to reorganize the state bank, after according a hearing to all interested parties he shall enter an order proposing a reorganization plan. A copy of the plan shall be sent to each depositor and creditor who will not receive payment of his claim in full under the plan, together with notice that unless the plan is disapproved within fifteen days in writing by persons holding one-third or more of the aggregate amount of such claims, the director will proceed to effect the reorganization. A department, agency or political subdivision of this state holding a claim which will not be paid in full is authorized to participate as any other creditor. H. No judgment, lien or attachment shall be executed upon any asset of the state bank while it is in the possession of the director. Upon the election of the director to liquidate or reorganize: (1) any lien or attachment, other than an attorney's or mechanic's lien, obtained upon any asset of the state bank during the director's possession or within four months prior to commencement thereof shall be vacated, except liens created by the director while in possession; and (2) any transfer of an asset of the state bank made after or in contemplation of its insolvency with intent to effect a preference shall be voided. I. The director may borrow money in the name of the state bank and may pledge its assets as security for the loan. J. All necessary and reasonable expenses of the director's possession of a state bank and of its reorganization or liquidation shall be defrayed from the assets thereof.

Legislative History

1953 Comp., § 48-22-61, enacted by Laws 1963, ch. 305, § 61; 1991, ch. 120,