§ 605 — Voluntary liquidation; sale of assets; forfeiture of charter by non-user

§ 605. Voluntary liquidation; sale of assets; forfeiture of charter by\nnon-user. 1. Any corporate banking organization, the assets of which\nhave a value at least equal to its liabilities, exclusive of any\nliability to shareholders or stockholders, as such, may voluntarily wind\nup its affairs; but no banking organization of which the superintendent\nhas taken possession in accordance with the provisions of section six\nhundred six of this chapter shall take any steps for such voluntary\ndissolution until it has received the written approval of the\nsuperintendent.\n 2. To effect a voluntary dissolution of any corporation, a meeting of\nthe stockholders or shareholders of such corporation having full voting\nrights, and if applicable any other stockholders or shareholders\nauthorized by the organization certificate or by-laws of such\ncorporation to vote on a resolution to effect a voluntary dissolution,\nshall be held upon not less than twenty days' written notice to each\nsuch stockholder or shareholder, either served personally or mailed to\nthe stockholder or shareholder at the address appearing upon the books\nof the corporation, and containing a statement of the purpose for which\nsuch meeting is called. Proof by affidavit of due service of such notice\nshall be filed in the office of the corporation before or at the time of\nsuch meeting.\n In the case of a mutual savings bank, a meeting of its board of\ntrustees shall be held upon like notice. Proof by affidavit of due\nservice of such notice shall be filed in the office of the savings bank\nbefore or at the time of such meeting.\n 3. At such a meeting of stockholders or mutual shareholders, such\nstockholders or mutual shareholders may, by a vote of the owners of at\nleast two-thirds in amount of such stock, or of the capital of such\nmutual corporation, direct that the corporation be closed and its\nbusiness wound up. The proceedings of such meeting shall be entered in\nthe minutes of such corporation.\n At such a meeting of the board of trustees of a savings bank, the\ntrustees may by vote of not less than two-thirds of their whole number,\ndirect by resolution that the savings bank be closed and its business\nwound up. The vote on such resolution shall be recorded with the\nresolution in the minutes of the board of trustees.\n A copy of the minutes of such meeting of stockholders or mutual\nshareholders or board of trustees, verified by the presiding officer and\nby the secretary of such meeting, shall be filed in the office of the\nsuperintendent within five days after the date of such meeting.\n 4. Within three months after the date of any such meeting, application\nmay be made to the supreme court, after due notice to the\nsuperintendent, for an order declaring the business of such corporation\nclosed. In a proper case, the court shall make such order which shall\nprescribe the notice to be given to creditors and depositors to present\ntheir claims to the corporation for payment. In the closing order, the\ncourt shall set a date certain by which claims must be presented to the\ncorporation for payment. The corporation need not consider any claims\nsubmitted after that date. Within five days after the making of such\norder, a certified copy thereof shall be filed in the office of the\nsuperintendent. Upon the entry of such order such corporation shall\ncease to do business and shall wind up its affairs, pay its creditors\nand depositors, if any, and, except in the case of a mutual savings\nbank, distribute any remaining assets among its shareholders or\nstockholders according to their respective rights and interests. The\ncorporation or any creditor or depositor thereof, upon due notice, may\napply to the court that issued the closing order for a determination as\nto any disputed claim or for any other relief necessary to effectuate\nthe liquidation and dissolution of the corporation. Any petition,\napplication, or motion to vacate, set aside, modify or amend such order\nso as to permit the corporation to resume business shall have\nincorporated therein a certificate of the superintendent certifying that\nafter investigation the superintendent has found that the public\nconvenience and advantage will be promoted by the granting of said\npetition, application or motion.\n 4-a. (a) Such corporation may, at any time after entry of the order\ndescribed in subdivision four of this section, cause to be mailed to\neach person claiming to be, or appearing upon the books of such\ncorporation to be\n (1) the owner of any personal property in the custody or possession of\nsuch corporation as bailee or depositary for hire or otherwise,\nincluding the contents of any safe, vault or box theretofore opened for\nnon-payment of rental in accordance with the provisions of this chapter,\nor\n (2) the lessee of any safe, vault or box, a notice in writing directed\nby registered mail to such person at his last address as the same\nappears on the books of such corporation or at his last known address if\nno address appears on such books, notifying such person to remove all\nsuch property or the contents of any such safe, vault or box, within a\nperiod stated in said notice, which period shall be not less than sixty\ndays from the date of such notice, and further notifying such person of\nthe terms and provisions of this subdivision. The contract of bailment\nor of deposit for hire, or lease of safe, vault or box, if any, between\nthe person to whom such notice is mailed and such corporation shall\ncease and determine upon the date for removal fixed in such notice. Such\nperson shall have a claim against such corporation for the amount of the\nunearned rent or charges, if any, paid by such person from the date\nfixed in such notice, if the property or contents is removed on or\nbefore such date, or from the date of actual removal, if the property or\ncontents is removed after such date.\n (b) If such property or contents shall not be removed, and all rent or\nstorage and other charges theretofore accrued, if any, shall not be\npaid, within the time fixed by such notice, such corporation shall,\nwithin thirty days thereafter, cause such property to be inventoried, or\nsuch safe, vault or box, or any package, parcel or receptacle in the\ncustody or possession of such corporation as bailee or depositary for\nhire or otherwise, to be opened and the contents, if any, to be removed\nand inventoried, in the presence of an officer of such corporation and\nof a notary public, not an officer or employee thereof. Such property or\ncontents shall thereupon be sealed up by such notary public in a package\ndistinctly marked by him with the name of the person in whose name such\nproperty or such safe, vault, box, package, parcel or receptacle stands\nupon the books of such corporation, and a copy of the inventory of the\nproperty therein shall be certified and attached thereto by such notary\npublic. Such package may be kept in such place as the corporation, with\nthe approval of the superintendent, may determine, at the expense and\nrisk of the person in whose name it stands until delivered to such\nperson or until sold, destroyed or otherwise disposed of as hereinafter\nprovided. Such package may, from time to time, pending final disposition\nof its contents, be opened in the presence of an officer of such\ncorporation and of a notary public, not an officer or employee thereof,\nfor inspection or appraisal, or to enable such corporation to exercise\nany of the powers conferred or duties imposed by this article. Whenever\nsuch package is opened, the notary shall endorse on the outside thereof\nthe date of opening and re-sealing, and shall certify and attach thereto\na list of the articles, if any, removed therefrom, or placed or replaced\ntherein, and an affidavit of the officer in whose presence it was opened\nshowing the reason for opening the same.\n (c) At any time prior to the sale, destruction or other disposition of\nthe contents thereof, the person in whose name such package stands may\nrequire the delivery thereof upon payment of all rental or storage\ncharges accrued, and all other charges or expenses paid or incurred to\nthe date of delivery with respect to such package or the contents\nthereof, including the cost of inventorying or of opening and\ninventorying, the fees of the notary public, the cost of preparing and\nmailing the notice, and advertising, if any. If the principal of, or\ninterest, income, or dividends on any bonds, stock certificates,\npromissory notes, choses in action or other securities contained in such\npackage, is or becomes due and payable while it is in the possession of\nsuch corporation, it may at its election collect such principal,\ninterest, income or dividends, and from the proceeds thereof may deduct\nall such sums due for rental and other charges, until the time of such\ncollection. The balance, if any, of the amount or amounts so collected\nshall be disposed of as hereafter in paragraph (e) of this subdivision\nand in subdivision five hereof provided.\n (d) After the expiration of one year from the time of mailing the\nnotice in paragraph (a) of this subdivision described, such corporation\nmay apply to the supreme court for an order authorizing such corporation\nto sell, destroy or otherwise dispose of the contents of such package.\nIn a proper case, the court shall make such order upon such terms and\nconditions as justice may require. The application for an order of the\nsupreme court pursuant to this paragraph shall be made upon an order to\nshow cause, which shall provide that notice thereof to the person in\nwhose name such package stands and to any other person claiming or\nappearing to have an interest therein, shall be published, mailed or\ngiven in such other manner as the court may prescribe. Whenever,\npursuant to the provisions of this paragraph, a corporation is given the\npower to sell the contents of any package, such power to sell shall be\ndeemed a power to sell in satisfaction of a lien for non-payment of\nrental or storage charges accrued, and all other charges and expenses\npaid or incurred to the date of sale with respect to such package and\nthe contents thereof, including the charges and expenses described in\nparagraph (c) hereof. Such power to sell, or the power to destroy or\notherwise dispose of, when authorized pursuant to the provisions of this\nparagraph, shall be deemed to include the power to sell, destroy or\notherwise dispose of, as the case may be, any bonds, stock certificates,\npromissory notes, choses in action, or other securities, and any other\ntangible or intangible property contained in any package, regardless of\nwhether or not it shall appear from such securities or properties that\nthe person in whose name the package stands, possesses title to or\ninterest in such securities or other properties, or power to transfer\nsuch title or interest, and any sale of such securities or properties,\npursuant to this paragraph, shall vest good title thereto in the\npurchaser thereof.\n (e) From the proceeds of any sale, such corporation shall deduct all\nrental or storage charges accrued, and all other charges and expenses\npaid or incurred to the date of sale, including the charges and expenses\ndescribed in paragraph (c) hereof, and the expenses of sale. The balance\nof such proceeds, if any, shall be credited to the person in whose name\nsuch package stood and, unless sooner paid over to the superintendent\npursuant to subdivision five hereof, shall be paid over to such person,\nhis assignee or legal representative on satisfactory evidence of\nidentity.\n (f) The provisions of this subdivision do not affect or preclude any\nother remedy by action or otherwise for the enforcement of the claims or\nrights of such corporation against the person in whose name any\nproperty, or any safe, vault, box, package, parcel or receptacle stands,\nnor affect, nor bar the right of such corporation to recover, before\nsale, any debt or claim due it or, after sale, so much of the debt or\nclaim as shall not be paid by the proceeds of the sale.\n (g) The procedure prescribed in this subdivision may be followed by\nany corporation winding up its affairs in accordance with the provisions\nof this section, notwithstanding the fact that such corporation may have\ncommenced proceedings to open, or may have opened, any safe, vault or\nbox for non-payment of rental in accordance with other provisions of\nthis chapter and notwithstanding the contents of any notice that may\nhave been given by such corporation in accordance with any requirement\nof this section.\n 5. When such corporation shall have given the notice to creditors and\ndepositors to present their claims as prescribed in the order entered in\naccordance with the provisions of subdivision four hereof, and shall\nhave paid all its debts and obligations for which a legal claimant has\nbeen found, and shall have complied with the provisions of subdivision\nfour-a hereof, it shall, before applying to court for a release upon\nfinal accounting or for a final order of dissolution, make a verified\ntranscript or statement from its books of the names of all depositors,\ncreditors, stockholders, shareholders, owners of personal property in\nthe custody or possession of such corporation as bailee, depositary for\nhire or otherwise, or lessees of any safe, vault or box, who have not\nclaimed or have not received the deposits, debts, dividends, interest\nbalances or other amounts due them, and shall file such transcript or\nstatement with the superintendent together with all identifying\ninformation, including, in the case of unclaimed proceeds of any sale\npursuant to subdivision four-a hereof, a certified copy of the\ninventory, and an affidavit showing compliance with the provisions of\nsaid subdivision, a list of the articles sold, the price or prices\nobtained therefor, and the amount or amounts deducted and retained from\nthe proceeds and such corporation shall thereupon pay over such\nunclaimed amounts to the superintendent as trustee for the persons\nentitled to receive them, as provided in article two of this chapter.\n 6. Upon the petition of such corporation showing\n (a) that all its debts and obligations have been discharged except\nthose for which no legal claimant has been found,\n (b) that notice was given to creditors and depositors to present their\nclaims as prescribed by the court and that any period prescribed by the\ncourt for the presentation of such claims has expired,\n (c) that the provisions of subdivision four-a hereof, if applicable,\nhave been complied with and\n (d) that all unclaimed amounts referred to in subdivision five hereof\nhave been paid over to the superintendent, and on notice to the\ncomptroller and the superintendent and such further notice as the court\nmay prescribe, the court may, on such terms as justice requires, make an\norder affirming such disposition of such unclaimed amounts and declaring\nsuch corporation dissolved and its corporate existence terminated.\n 7. On filing with the superintendent a certified copy of the order of\ndissolution described in the last preceding subdivision of this section,\nthe corporation shall cease to exist.\n 8. Unless the superintendent shall otherwise provide, any corporate\nbanking organization that, pursuant to an agreement, sells or conveys\nmore than fifty per centum of its assets without the written approval of\nthe superintendent shall take the proceedings for voluntary dissolution\nherein prescribed and, within six months from the date of such sale or\nconveyance, shall file with the superintendent a certified copy of the\nclosing order in the form prescribed by subdivision four of this\nsection. The corporate banking organization, upon making written\napplication to the superintendent for approval of the sale or conveyance\nof more than fifty per centum of its assets, shall pay an investigation\nfee as prescribed pursuant to section eighteen-a of this chapter. If a\nclosing order is required to be filed pursuant to this subdivision and\nsuch order is not filed within the time prescribed, the superintendent\nshall have the power, in the superintendent's discretion, to take\npossession of the business and property of such corporation and proceed\nwith the liquidation thereof under the provisions of this article.\n 9. If the superintendent shall certify that any corporate banking\norganization is deemed by him to have abandoned and forfeited its\ncharter by non-user and to be virtually in process of liquidation, such\ncorporation, if its assets have a value at least equal to its\nliabilities, exclusive of any liability to shareholders or stockholders,\nas such, shall take the proceeding for voluntary dissolution herein\nprescribed and, within six months from the date of such certificate,\nshall file with the superintendent a certified copy of the closing order\nin the form prescribed by subdivision four of this section. If such\norder is not filed within the time prescribed, the superintendent shall\nhave the power, in his discretion, to take possession of the business\nand property of such corporation and proceed with the liquidation\nthereof under the provisions of this article.\n 10. (a) Upon the petition of the superintendent showing\n (1) that any corporate banking organization has ceased to transact\nbusiness, or has commenced but failed to complete proceedings for its\nvoluntary dissolution in accordance with the banking law, or for any\nother reason is deemed by the superintendent to have abandoned and\nforfeited its charter by non-user, and\n (2) that all of its assets have been distributed, or that the\nsuperintendent has no knowledge as to the existence of any such assets,\nthe supreme court in the judicial district where such banking\norganization maintained its principal place of business may make an\norder declaring such corporation dissolved and the corporate existence\nthereof terminated. Upon the filing of a certified copy of such order in\nthe office of the superintendent the existence of such corporation shall\ncease and determine.\n (b) If the petition of the superintendent shall show, in addition to\nthe allegations required by the provisions of subparagraph (1) of\nparagraph (a) of this subdivision, that such banking organization\n (1) has undistributed assets and it appears that in the opinion of the\nsuperintendent the cost of taking possession of and liquidating such\nassets in accordance with the provisions of this article will exceed the\nfair value of such assets, and\n (2) has failed, for a period of two years after ceasing to transact\nbusiness or commencing proceedings for its voluntary dissolution, to\ncomplete such proceedings or to produce proof satisfactory to the\nsuperintendent that it has complied with or is in the process of\ncomplying with the provisions of the banking law, the court may, upon\nsuch notice as it may prescribe, make an order declaring such\ncorporation dissolved and the corporate existence thereof terminated,\nand further declaring that such assets have been abandoned and providing\nfor the payment, delivery or transfer thereof to the superintendent in\nsuch manner and at such time as the court may direct. Upon the filing of\na certified copy of such order in the office of the superintendent the\nexistence of such corporation shall cease and determine. At any time\nwithin six months after the entry of such order, the court may upon good\ncause shown and upon such terms as justice may require, vacate or modify\nsuch order. At the expiration of such six-month period or such further\nperiod as the court may prescribe, the superintendent shall sell, redeem\nor otherwise dispose of such assets and from the proceeds thereof may\nretain and pay all costs, disbursements and legal fees allowed by the\ncourt and any assessments, penalties or forfeitures incurred by such\nbanking organization under the banking law. The remaining proceeds if\nany shall forthwith be paid into the state treasury for the use and\nbenefit of the state.\n 11. (a) Any foreign banking corporation which has been licensed\npursuant to article two of this chapter to engage in business in this\nstate, including any such corporation whose license has been surrendered\nor revoked, may, if it so desires, take proceedings for the voluntary\nliquidation of its business and property in this state in accordance\nwith the provisions of paragraph (b) of this subdivision; but no such\nliquidation shall be commenced while the superintendent is in possession\nof such business and property unless such corporation shall have first\nreceived the written approval of the superintendent. In any such\nliquidation the claims of creditors of such corporation arising out of\ntransactions had by them with its New York agency or agencies or branch\nor branches shall be accorded the same preference accorded to similar\nclaims in a liquidation under subdivision four of section six hundred\nsix of this article.\n (b) To effect such a voluntary liquidation, a foreign corporation\nshall subscribe, acknowledge and file with the superintendent at his\noffice a written notice of its intention so to liquidate, which notice\nshall specify the date of commencement of the liquidation, and upon such\ndate, such corporation shall forthwith cease to transact business in\nthis state if it has not already done so, and shall proceed to wind up\nits affairs in this state. Within thirty days after such date, such\ncorporation shall make application to the supreme court, after due\nnotice to the superintendent, for an order prescribing the notice to be\ngiven to the preferred creditors hereinabove described to present their\nclaims for payment. Every such corporation shall, in the course of such\nliquidation, comply with the provisions of subdivisions four-a, five and\nsix of this section, except that an order entered pursuant to\nsubdivision six of this section shall affirm the disposition of the\nunclaimed amounts therein referred to and shall authorize the turn-over\nof all of the assets remaining after payment of the preferred creditors\nto the principal office of such corporation. Within five days after the\nmaking of any order described in this paragraph a certified copy thereof\nshall be filed in the office of the superintendent.\n (c) Any foreign banking corporation which has been licensed pursuant\nto article two of this chapter to engage in business in this state,\nwhich shall liquidate its business and property in this state without\nelecting to comply with the provisions of paragraphs (a) and (b) of this\nsubdivision, shall, upon completion of the liquidation, make a verified\ntranscript or statement from its books of the names of all creditors\nwhose claims arise out of transactions had by them with its New York\nagency or agencies, or its New York branch or branches and of all owners\nof personal property in the custody or possession of such agency or\nagencies or branch or branches as bailee, depositary for hire or\notherwise, who have not claimed or have not received the debts or other\namounts due them, and shall file such transcript or statement with the\nsuperintendent together with all identifying information, including, in\nthe case of unclaimed proceeds of any sale of personal property, a list\nof the articles sold, the price or prices obtained therefor, and the\namount or amounts deducted and retained from the proceeds, and such\ncorporation shall thereupon pay over such unclaimed amounts to the\nsuperintendent as trustee for the persons entitled to receive them, as\nprovided in article two of this chapter. Any such corporation so\nliquidating its business and property in this state may, if it so\ndesires, follow the procedures for the disposition of personal property\nin the custody or possession of, and exercise the same powers and\nprivileges with respect thereto accorded to, banking organizations in\nsubdivision four-a of this section. To effectuate the purposes of this\nchapter, the superintendent may impose additional requirements and\nprocedures for the foreign banking corporation to follow with respect to\nthe dissolution of the licensed office.\n (d) For the purposes of this subdivision, the words "debts",\n"obligations" and "deposits", as used in subdivisions four-a, five and\nsix of this section, shall be deemed to refer to the preferred claims\nhereinabove described, the words "creditors" and "depositors" shall be\ndeemed to refer to the owners of such preferred claims, the references\nin subdivisions four-a and five of this section to the order entered in\naccordance with subdivision four of this section shall be deemed to\nrefer to the like order entered in accordance with the provisions of\nthis subdivision, and, except when the context shall otherwise require,\nthe word "corporation" shall be deemed to refer to the New York agency\nor agencies, or branch or branches and the word "officer" shall include\nthe agent or other person in charge of such agency or agencies and any\nperson in charge of or who is an officer of such branch or branches or\nof the liquidation.\n 12. If the superintendent shall at any time find that any of the\nreasons enumerated in section six hundred six of this article for\ntakeover of the business and property of a banking organization or of\nthe business and property in this state of a foreign banking corporation\nshall exist, he may, in his discretion, forthwith take possession of\nsuch business and property in accordance with the provisions of such\nsection notwithstanding that such banking organization or corporation\nmay have theretofore commenced proceedings for the voluntary liquidation\nof such business and property in accordance with this section.\n