This text of Texas § 204.120 (SEIZURE AND LIQUIDATION.) is published on Counsel Stack Legal Research, covering Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Sec. 204.120. SEIZURE AND LIQUIDATION.
(a)If the commissioner finds that any of the factors set forth in Section 204.116 are true with respect to a foreign bank licensed to establish and maintain a Texas state branch or agency, the commissioner may by order 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 commissioner shall retain possession until the foreign bank resumes business in this state or is finally liquidated, except that the commissioner may permit the foreign bank to resume business in this state on conditions the commissioner requires. An orde
Free access — add to your briefcase to read the full text and ask questions with AI
Sec. 204.120. SEIZURE AND LIQUIDATION. (a) If the commissioner finds that any of the factors set forth in Section 204.116 are true with respect to a foreign bank licensed to establish and maintain a Texas state branch or agency, the commissioner may by order 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 commissioner shall retain possession until the foreign bank resumes business in this state or is finally liquidated, except that the commissioner may permit the foreign bank to resume business in this state on conditions the commissioner requires. An order issued under this section shall be served on the foreign bank in the manner required by Section 204.117 (a)(2).
(b) As soon as practicable after taking possession of the property and business of a foreign bank pursuant to Subsection (a), the commissioner shall initiate a receivership proceeding by filing a copy of the order issued under this section in a district court in Travis County to be governed by Chapter 36 as if the foreign bank were a Texas state bank, except as otherwise provided by this section. Notwithstanding the priorities established by Chapter 36 , the depositors and creditors of the Texas state branch or agency, arising out of transactions with and recorded on the books of the Texas state branch or 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 Texas state branch or 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 Texas state branch or agency is in Travis County, except that on motion filed and served concurrently with or before the filing of the answer, the court may, on a finding of good cause, transfer the action to the county of the Texas state branch or agency location.
(d) The foreign bank may contest the commissioner's actions as provided by this subsection. On or before the 10th day after the date the commissioner has taken possession of the property and business of a foreign bank pursuant to Subsection (a), the foreign bank, acting through a majority of its directors, may intervene in the action filed by the banking commissioner to challenge the commissioner's closing of the foreign bank's Texas state branch or agency and to enjoin the commissioner or other receiver from liquidating its assets. The court may issue an ex parte order restraining the commissioner or other receiver from liquidating the foreign bank's assets pending a hearing on the injunction. The commissioner or other receiver shall comply with the restraining order but may petition the court for permission to liquidate an asset as necessary to prevent its loss or diminution pending the outcome of the injunction. The commissioner or other receiver may not be required to post bond. The court shall hear this 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 trial court. If the commissioner prevails in the trial court, liquidation of the state trust company may proceed unless the trial court or appellate court orders otherwise. If liquidation is enjoined or stayed pending appeal, the trial court retains jurisdiction to permit liquidation of an asset as necessary to prevent its 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 the 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.