§ 45-2-1502 — Commissioner in possession

Tennessee § 45-2-1502

• Jurisdiction: Tennessee
• Title: 45

Text

(a) The commissioner may take possession of a state bank if, after a hearing, the commissioner 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) (1) The commissioner shall take possession by posting upon the premises a notice reciting that the commissioner is assuming possession pursuant to this section and the time, not earlier than the posting of the notice, when possession shall be deemed to commence. A copy of the notice shall be filed in a court of general or equity jurisdiction in the county in which the institution is located. The commissioner shall notify the federal reserve bank of the district of taking possession of any state bank that is a member of the federal reserve system, and shall notify the federal deposit insurance corporation of the taking possession of any insured bank. (2) When the commissioner has taken possession of a state bank, the commissioner shall be 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 the commissioner's possession by restoring the bank to its board of directors, to appoint a receiver to have all of the rights, powers, duties and obligations granted to the commissioner in possession for the purpose of liquidation or reorganization, and to reorganize or liquidate the bank in accordance with §§ 45-2-1503 and 45-2-1504 . As soon as practicable after taking possession, the commissioner 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. (3) When the commissioner has taken possession, there shall be a postponement until six (6) months after the commencement of 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. (c) (1) If, in the opinion of the commissioner, an emergency exists that will result in serious losses to the depositors, the commissioner may take possession of a state bank without a prior hearing. Any person aggrieved and directly affected by this action of the commissioner may have a review by certiorari as provided in title 27, chapter 9. (2) If the commissioner determines to liquidate the state bank, the commissioner shall give notice of the determination to the directors, stockholders, depositors and known creditors. Upon a determination to liquidate, the commissioner may, with ex parte approval of the court in which the notice of possession was filed, sell all or any part of the state bank's assets to another state or national bank or to the federal deposit insurance corporation. The commissioner may also, with ex parte approval of the court, borrow from the federal deposit insurance corporation any amount necessary to facilitate the assumption of deposit liabilities by a newly chartered or existing bank and may assign any part or all of the assets of the state bank as security for the loan. (3) If the commissioner determines to reorganize the state bank, after according a hearing to all interested parties, the commissioner 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 a claim in full under the plan, together with notice that, unless within fifteen (15) days the plan is disapproved in writing by persons holding one-third (1/3) or more of the aggregate amount of the claims, the commissioner will proceed to effect the reorganization. A department, agency or political subdivision of this state holding a claim that will not be paid in full is authorized to participate as any other creditor. (d) No judgment, lien or attachment shall be executed upon any asset of the state bank while it is in the possession of the commissioner. Upon the election of the commissioner in connection with a liquidation or reorganization: (1) Any lien or attachment, other than an attorney's or mechanic's lien, obtained upon any asset of the state bank during the commissioner's possession or within four (4) months prior to commencement thereof shall be vacated except liens created by the commissioner 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. (e) The commissioner may borrow money in the name of the state bank and may pledge its assets as security for the loan. (f) All necessary and reasonable expenses of the commissioner's possession of a state bank and of its reorganization or liquidation shall be defrayed from the assets thereof.

Legislative History

Acts 1969, ch. 36, § 1 (3.502); 1973, ch. 294, § 6; T.C.A., § 45-902; Acts 1980, ch. 510, §§ 2-4; 1999, ch. 112, § 14.