Source: https://www.law.cornell.edu/uscode/text/20/1087%E2%80%933
Timestamp: 2019-07-18 17:19:20
Document Index: 669735633

Matched Legal Cases: ['§ 1087', '§ 1087', '§ 1087', '§\u202f101', '§\u202f602', '§\u202f101', '§\u202f603', '§\u202f439', '§\u202f127', '§\u202f317', '§\u202f439', '§\u202f8', '§\u202f532']

20 U.S. Code § 1087–3 - Reorganization of Student Loan Marketing Association through formation of Holding Company | US Law | LII / Legal Information Institute
U.S. Code › Title 20 › Chapter 28 › Subchapter IV › Part B › § 1087–3
20 U.S. Code § 1087–3 - Reorganization of Student Loan Marketing Association through formation of Holding Company
(a) Actions by Association’s Board of DirectorsThe Board of Directors of the Association shall take or cause to be taken all such action as the Board of Directors deems necessary or appropriate to effect, upon the shareholder approval described in subsection (b), a restructuring of the common stock ownership of the Association, as set forth in a plan of reorganization adopted by the Board of Directors (the terms of which shall be consistent with this section) so that all of the outstanding common shares of the Association shall be directly owned by a Holding Company. Such actions may include, in the Board of Director’s discretion, a merger of a wholly owned subsidiary of the Holding Company with and into the Association, which would have the effect provided in the plan of reorganization and the law of the jurisdiction in which such subsidiary is incorporated. As part of the restructuring, the Board of Directors may cause—
(c) TransitionIn the event the shareholders of the Association approve the plan of reorganization under subsection (b), the following provisions shall apply beginning on the reorganization effective date:
(2) Transfer of certain property
(A) In generalExcept as provided in this section, on the reorganization effective date or as soon as practicable thereafter, the Association shall use the Association’s best efforts to transfer to the Holding Company or any subsidiary of the Holding Company (or both), as directed by the Holding Company, all real and personal property of the Association (both tangible and intangible) other than the remaining property. Subject to the preceding sentence, such transferred property shall include all right, title, and interest in—
(3) Transfer of personnel
(5) Certification prior to dividend
(6) Restrictions on new business activity or acquisition of assets by Association
(A) In generalAfter the reorganization effective date, the Association shall not engage in any new business activities or acquire any additional program assets described in section 1087–2(d) of this title other than in connection with—
contractual commitments for future warehousing advances, or pursuant to letters of credit or standby bond purchase agreements, which are outstanding as of the reorganization effective date;
(7) Issuance of debt obligations during the transition period; attributes of debt obligations
(8) Monitoring of safety and soundness
(A) Obligation to obtain, maintain, and report informationThe Association shall obtain such information and make and keep such records as the Secretary of the Treasury may from time to time prescribe concerning—
(B) Summary reports
(C) Separate operation of corporations
(iii) Corporate office
(v) One officer requirement
(vi) Transactions
(vii) Credit prohibition
(viii) Amounts collected
(D) Encumbrance of assets
(E) Holding Company activities
(9) Issuance of stock warrants
(A) In generalOn the reorganization effective date, the Holding Company shall issue to the District of Columbia Financial Responsibility and Management Assistance Authority a number of stock warrants that is equal to one percent of the outstanding shares of the Association, determined as of the last day of the fiscal quarter preceding September 30, 1996, with each stock warrant entitling the holder of the stock warrant to purchase from the Holding Company one share of the registered common stock of the Holding Company or the Holding Company’s successors or assigns, at any time on or before September 30, 2008. The exercise price for such warrants shall be an amount equal to the average closing price of the common stock of the Association for the 20 business days prior to September 30, 1996, on the exchange or market which is then the primary exchange or market for the common stock of the Association. The number of shares of Holding Company common stock subject to each stock warrant and the exercise price of each stock warrant shall be adjusted as necessary to reflect—
(B) Authority to sell or exercise stock warrants; deposit of proceeds
The District of Columbia Financial Responsibility and Management Assistance Authority is authorized to sell or exercise the stock warrants described in subparagraph (A). The District of Columbia Financial Responsibility and Management Assistance Authority shall deposit into the account established under section 1155(e) [1] of this title amounts collected from the sale and proceeds resulting from the exercise of the stock warrants pursuant to this subparagraph.
(10) Restrictions on transfer of Association shares and bankruptcy of Association
(d) Termination of AssociationIn the event the shareholders of the Association approve a plan of reorganization under subsection (b), the Association shall dissolve, and the Association’s separate existence shall terminate on September 30, 2008, after discharge of all outstanding debt obligations and liquidation pursuant to this subsection. The Association may dissolve pursuant to this subsection prior to such date by notifying the Secretary of Education and the Secretary of the Treasury of the Association’s intention to dissolve, unless within 60 days after receipt of such notice the Secretary of Education notifies the Association that the Association continues to be needed to serve as a lender of last resort pursuant to section 1087–2(q) of this title or continues to be needed to purchase loans under an agreement with the Secretary described in subsection (c)(6). On the dissolution date, the Association shall take the following actions:
(1) Establishment of a trust
(2) Use of trust assets
(3) Obligations not transferred to the trust
(4) Transfer of remaining assets
(e) Operation of Holding CompanyIn the event the shareholders of the Association approve the plan of reorganization under subsection (b), the following provisions shall apply beginning on the reorganization effective date:
(1) Holding Company Board of Directors
(2) Holding Company nameThe names of the Holding Company and any subsidiary of the Holding Company (other than the Association)—
(3) Use of Sallie Mae name
Subject to paragraph (2), the Association may assign to the Holding Company, or any subsidiary of the Holding Company, the “Sallie Mae” name as a trademark or service mark, except that neither the Holding Company nor any subsidiary of the Holding Company (other than the Association or any subsidiary of the Association) may use the “Sallie Mae” name on, or to identify the issuer of, any debt obligation or other security offered or sold by the Holding Company or any subsidiary of the Holding Company (other than a debt obligation or other security issued to and held by the Holding Company or any subsidiary of the Holding Company). The Association shall remit to the account established under section 1155(e) [2] of this title, $5,000,000, within 60 days of the reorganization effective date as compensation for the right to assign the “Sallie Mae” name as a trademark or service mark.
(4) Disclosure requiredUntil 3 years after the dissolution date, the Holding Company, and any subsidiary of the Holding Company (other than the Association), shall prominently display—
(f) Strict construction
(g) Right to enforce
(h) Deadline for reorganization effective date
(2) Dissolution date
(3) Holding Company
(4) Remaining obligations
(5) Remaining propertyThe term “remaining property” means the following assets and liabilities of the Association which are outstanding as of the reorganization effective date:
(7) Reorganization effective date
(8) Subsidiary
Pub. L. 104–208, div. A, title I, § 101(e) [title VI, § 602(d)], Sept. 30, 1996, 110 Stat. 3009–233, 3009–289, provided that this section is repealed effective one year after date on which all obligations of trust established under subsec. (d)(1) of this section have been extinguished, if reorganization occurs in accordance with this section, or date on which all obligations of trust established under section 1087–2(s)(3)(A) of this title have been extinguished, if reorganization does not occur in accordance with this section.
Section 1155(e) of this title, referred to in subsecs. (c)(9)(B) and (e)(3), was in the original a reference to section 3(e) of the Student Loan Marketing Association Reorganization Act of 1996, and was translated as reading section 603(e) of that Act, which is Pub. L. 104–208, div. A, title I, § 101(e) [title VI, § 603(e)], Sept. 30, 1996, 110 Stat. 3009–233, 3009–293, to reflect the probable intent of Congress, because that Act does not contain a section 3(e), but does contain a section 603(e) which establishes the account referred to in text.
A prior section 1087–3, Pub. L. 89–329, title IV, § 439A, as added Pub. L. 94–482, title I, § 127(a), Oct. 12, 1976, 90 Stat. 2141, related to a five-year nondischargeability of certain loan debts, prior to repeal by Pub. L. 95–598, title III, § 317, Nov. 6, 1978, 92 Stat. 2678, eff. Nov. 6, 1978.
A prior section 1087–3a, Pub. L. 89–329, title IV, § 439B, as added Pub. L. 95–566, § 8, Nov. 1, 1978, 92 Stat. 2404, authorized any loan under this part to be counted as part of the expected family contribution in the determination of need, prior to repeal by Pub. L. 97–35, title V, § 532(b)(2), Aug. 13, 1981, 95 Stat. 452, applicable to loans for the statement required by section 1078(a)(2)(A) of this title is completed on or after Oct. 1, 1981.