§ 605-A — Transfer of deposit liabilities of bank or trust company; sale or pledge of assets to facilitate such transfer

§ 605-a. Transfer of deposit liabilities of bank or trust company;\nsale or pledge of assets to facilitate such transfer. 1. A bank or trust\ncompany may, pursuant to a plan approved by the superintendent, enter\ninto an agreement with another bank or trust company, whereby its\nliabilities to depositors will be assumed by such other bank or trust\ncompany. To facilitate the consummation of such plan and agreement, such\nbank or trust company may borrow money from the Federal Deposit\nInsurance Corporation and pledge all or any part of its assets as\nsecurity for the money so borrowed, or it may sell all or any part of\nits assets to Federal Deposit Insurance Corporation and the money so\nborrowed or realized with or without any other assets belonging to such\nbank or trust company, may be transferred by it to such other bank or\ntrust company, in consideration of the latter's agreement to assume and\npay the deposit liabilities of the former. If the superintendent shall\nthereafter take possession of the business and property of such bank or\ntrust company, pursuant to this article, the validity of a claim against\nsuch bank or trust company which was in existence when such plan was\nconsummated and remains unpaid shall be determined pursuant to the\nprovisions of section six hundred twenty to six hundred twenty-five\ninclusive of this article as though such plan had not been consummated.\nNothing in this section nor in any plan consummated pursuant to this\nsection shall be deemed to require allowance of any claim if such claim\nwould not otherwise be allowable in the liquidation proceedings. If such\nclaim is allowed or ultimately established, the owner thereof shall be\nentitled to dividends on his claim as though such plan had not been\nconsummated, and as though the assets of such bank or trust company had\nbeen taken over for liquidation immediately prior to any sale, pledge or\ntransfer made pursuant to such plan. If such bank or trust company in\nliquidation does not have sufficient other assets to pay such dividends,\nthe deficiency shall be paid from the proceeds of the sale or\nliquidation of the assets sold or pledged by such bank or trust company\nto Federal Deposit Insurance Corporation. If such proceeds prove\ninsufficient to pay such deficiency in full, any remaining deficiency\nshall be paid from the proceeds of the sale or liquidation of the assets\ntransferred by such bank or trust company to such other bank or trust\ncompany, exclusive of cash representing the proceeds of a sale to or a\nloan from Federal Deposit Insurance Corporation. The superintendent\nshall take such action as he shall deem necessary and appropriate to\nprotect the interests of the owner of any such claim, but he shall not\nbe required to obtain possession of any of the assets from the proceeds\nof which the deficiency in dividends upon such claim is payable, unless\nit shall appear that the amount required for the payment of such\ndeficiency is not otherwise available. The superintendent may, subject\nto the approval of the supreme court in the judicial district where the\nprincipal office of such bank or trust company is located, enter into an\nagreement with the Federal Deposit Insurance Corporation and the bank or\ntrust company to which any assets of such bank or trust company have\nbeen transferred, or either of them, whereby payments shall be made to\nhim as trustee for the benefit of the person or persons entitled thereto\nfrom time to time as cash is realized from the sale or liquidation of\nthe assets from the proceeds of which claims are payable. If such\nagreement is approved by the supreme court, after notice of a kind which\nthe court deems to be adequate to all persons whose interests, in the\nopinion of the court, may be affected thereby, such agreement shall be\nbinding upon all such persons. No action may be brought by any such\nperson to enforce payment of his claim unless it be clearly shown that\nthe superintendent has refused or failed to take necessary and\nappropriate action to protect the interests of such person. No sale,\nconveyance or transfer by a bank or trust company of all or any part of\nits assets shall be deemed to have been made pursuant to the provisions\nof this section unless the plan approved by the superintendent shall\nexpressly so state. Nothing contained in this section shall be deemed to\nrepeal, limit, modify or otherwise affect any right or power of a bank\nor trust company to sell, convey or transfer all or any part of its\nassets pursuant to any other provision of law.\n 2. A bank or trust company assuming the deposit liabilities of another\nbank or trust company in connection with a plan pursuant to this section\nmay issue preferred shares which, to the extent permitted by the\nsuperintendent, may have a retirable value greater than the amount\nreceived in payment for such shares.\n