NY Banking L § 605 (2021)
2021 New York Laws BNK - Banking Article 13 - Merger; Voluntary Dissolution; Superintendent's Taking Possession; Reorganization; Liquidation 605 - Voluntary Liquidation; Sale of Assets; Forfeiture of Charter by Non-User.

§ 605. Voluntary liquidation; sale of assets; forfeiture of charter by non-user.  1.  Any  corporate  banking organization, the assets of which have a value at  least  equal  to  its  liabilities,  exclusive  of  any liability to shareholders or stockholders, as such, may voluntarily wind up  its affairs; but no banking organization of which the superintendent has taken possession in accordance with the provisions  of  section  six hundred  six  of  this  chapter  shall take any steps for such voluntary dissolution  until  it  has  received  the  written  approval   of   the superintendent.   2.  To effect a voluntary dissolution of any corporation, a meeting of the stockholders or shareholders of such corporation having full  voting rights,  and  if  applicable  any  other  stockholders  or  shareholders authorized  by  the  organization  certificate  or   by-laws   of   such corporation  to  vote on a resolution to effect a voluntary dissolution, shall be held upon not less than twenty days'  written  notice  to  each such  stockholder  or shareholder, either served personally or mailed to the stockholder or shareholder at the address appearing upon  the  books of  the corporation, and containing a statement of the purpose for which such meeting is called. Proof by affidavit of due service of such notice shall be filed in the office of the corporation before or at the time of such meeting.   In the case of a mutual savings  bank,  a  meeting  of  its  board  of trustees  shall  be  held  upon  like  notice. Proof by affidavit of due service of such notice shall be filed in the office of the savings  bank before or at the time of such meeting.   3.  At  such  a  meeting  of stockholders or mutual shareholders, such stockholders or mutual shareholders may, by a vote of the owners  of  at least  two-thirds  in  amount  of  such stock, or of the capital of such mutual corporation, direct  that  the  corporation  be  closed  and  its business  wound  up. The proceedings of such meeting shall be entered in the minutes of such corporation.   At such a meeting of the board of trustees  of  a  savings  bank,  the trustees  may by vote of not less than two-thirds of their whole number, direct by resolution that the savings bank be closed  and  its  business wound  up.  The  vote  on  such  resolution  shall  be recorded with the resolution in the minutes of the board of trustees.   A copy of the minutes  of  such  meeting  of  stockholders  or  mutual shareholders or board of trustees, verified by the presiding officer and by  the  secretary  of such meeting, shall be filed in the office of the superintendent within five days after the date of such meeting.   4. Within three months after the date of any such meeting, application may  be  made  to  the  supreme  court,  after   due   notice   to   the superintendent,  for an order declaring the business of such corporation closed. In a proper case, the court shall make such  order  which  shall prescribe  the notice to be given to creditors and depositors to present their claims to the corporation for payment. In the closing  order,  the court  shall set a date certain by which claims must be presented to the corporation for payment. The corporation need not  consider  any  claims submitted  after  that  date.  Within five days after the making of such order, a certified copy thereof shall be filed  in  the  office  of  the superintendent.  Upon  the  entry  of  such order such corporation shall cease to do business and shall wind up its affairs,  pay  its  creditors and  depositors,  if  any,  and,  except in the case of a mutual savings bank,  distribute  any  remaining  assets  among  its  shareholders   or stockholders  according  to  their  respective rights and interests. The corporation or any creditor or depositor thereof, upon due  notice,  may apply  to the court that issued the closing order for a determination as to any disputed claim or for any other relief  necessary  to  effectuate  the  liquidation  and  dissolution  of  the  corporation.  Any petition, application, or motion to vacate, set aside, modify or amend such  order so   as  to  permit  the  corporation  to  resume  business  shall  have incorporated therein a certificate of the superintendent certifying that after  investigation  the  superintendent  has  found  that  the  public convenience and advantage will be  promoted  by  the  granting  of  said petition, application or motion.   4-a.  (a)  Such  corporation may, at any time after entry of the order described in subdivision four of this section, cause  to  be  mailed  to each  person  claiming  to  be,  or  appearing  upon  the  books of such corporation to be  (1) the owner of any personal property in the custody or possession of such  corporation  as  bailee  or  depositary  for  hire  or  otherwise, including  the contents of any safe, vault or box theretofore opened for non-payment of rental in accordance with the provisions of this chapter, or  (2) the lessee of any safe, vault or box, a notice in writing directed by registered mail to such person  at  his  last  address  as  the  same appears on the books of such corporation or at his last known address if no  address  appears  on such books, notifying such person to remove all such property or the contents of any such safe, vault or box,  within  a period  stated in said notice, which period shall be not less than sixty days from the date of such notice, and further notifying such person  of the  terms  and provisions of this subdivision. The contract of bailment or of deposit for hire, or lease of safe, vault or box, if any,  between the  person  to  whom  such  notice is mailed and such corporation shall cease and determine upon the date for removal fixed in such notice. Such person shall have a claim against such corporation for the amount of the unearned rent or charges, if any, paid by  such  person  from  the  date fixed  in  such  notice,  if  the  property or contents is removed on or before such date, or from the date of actual removal, if the property or contents is removed after such date.  (b) If such property or contents shall not be removed, and all rent or storage and other charges theretofore accrued,  if  any,  shall  not  be paid,  within  the  time  fixed  by such notice, such corporation shall, within thirty days thereafter, cause such property to be inventoried, or such safe, vault or box, or any package, parcel  or  receptacle  in  the custody  or  possession  of such corporation as bailee or depositary for hire or otherwise, to be opened and the contents, if any, to be  removed and  inventoried,  in the presence of an officer of such corporation and of a notary public, not an officer or employee thereof. Such property or contents shall thereupon be sealed up by such notary public in a package distinctly marked by him with the name of the person in whose name  such property  or such safe, vault, box, package, parcel or receptacle stands upon the books of such corporation, and a copy of the inventory  of  the property  therein shall be certified and attached thereto by such notary public. Such package may be kept in such place as the corporation,  with the  approval  of  the superintendent, may determine, at the expense and risk of the person in whose name  it  stands  until  delivered  to  such person  or until sold, destroyed or otherwise disposed of as hereinafter provided. Such package may, from time to time, pending final disposition of its contents, be opened  in  the  presence  of  an  officer  of  such corporation  and of a notary public, not an officer or employee thereof, for inspection or appraisal, or to enable such corporation  to  exercise any  of the powers conferred or duties imposed by this article. Whenever such package is opened, the notary shall endorse on the outside  thereof the date of opening and re-sealing, and shall certify and attach thereto a list of the articles, if any, removed therefrom, or placed or replaced  therein, and an affidavit of the officer in whose presence it was opened showing the reason for opening the same.  (c) At any time prior to the sale, destruction or other disposition of the  contents  thereof, the person in whose name such package stands may require the delivery thereof upon  payment  of  all  rental  or  storage charges  accrued,  and all other charges or expenses paid or incurred to the date of delivery with  respect  to  such  package  or  the  contents thereof,   including   the  cost  of  inventorying  or  of  opening  and inventorying, the fees of the notary public, the cost of  preparing  and mailing  the  notice,  and  advertising, if any. If the principal of, or interest,  income,  or  dividends  on  any  bonds,  stock  certificates, promissory notes, choses in action or other securities contained in such package,  is or becomes due and payable while it is in the possession of such corporation,  it  may  at  its  election  collect  such  principal, interest,  income or dividends, and from the proceeds thereof may deduct all such sums due for rental and other charges, until the time  of  such collection.  The  balance, if any, of the amount or amounts so collected shall be disposed of as hereafter in paragraph (e) of  this  subdivision and in subdivision five hereof provided.  (d)  After  the  expiration  of  one year from the time of mailing the notice in paragraph (a) of this subdivision described, such  corporation may apply to the supreme court for an order authorizing such corporation to  sell,  destroy or otherwise dispose of the contents of such package. In a proper case, the court shall make such order upon  such  terms  and conditions  as  justice may require. The application for an order of the supreme court pursuant to this paragraph shall be made upon an order  to show  cause,  which  shall  provide that notice thereof to the person in whose name such package stands and  to  any  other  person  claiming  or appearing  to  have  an  interest therein, shall be published, mailed or given in such  other  manner  as  the  court  may  prescribe.  Whenever, pursuant to the provisions of this paragraph, a corporation is given the power  to  sell the contents of any package, such power to sell shall be deemed a power to sell in satisfaction of  a  lien  for  non-payment  of rental  or  storage  charges accrued, and all other charges and expenses paid or incurred to the date of sale with respect to  such  package  and the  contents  thereof,  including the charges and expenses described in paragraph (c) hereof. Such power to sell, or the  power  to  destroy  or otherwise dispose of, when authorized pursuant to the provisions of this paragraph,  shall  be  deemed  to  include the power to sell, destroy or otherwise dispose of, as the case may be, any bonds, stock certificates, promissory notes, choses in action, or other securities, and  any  other tangible  or intangible property contained in any package, regardless of whether or not it shall appear from such securities or  properties  that the  person  in  whose  name  the  package stands, possesses title to or interest in such securities or other properties, or  power  to  transfer such  title  or interest, and any sale of such securities or properties, pursuant to this  paragraph,  shall  vest  good  title  thereto  in  the purchaser thereof.  (e)  From  the proceeds of any sale, such corporation shall deduct all rental or storage charges accrued, and all other  charges  and  expenses paid or incurred to the date of sale, including the charges and expenses described in paragraph (c) hereof, and the expenses of sale. The balance of  such proceeds, if any, shall be credited to the person in whose name such package stood and, unless sooner paid over  to  the  superintendent pursuant  to subdivision five hereof, shall be paid over to such person, his  assignee  or  legal  representative  on  satisfactory  evidence  of identity.  (f)  The  provisions of this subdivision do not affect or preclude any other remedy by action or otherwise for the enforcement of the claims or rights of  such  corporation  against  the  person  in  whose  name  any property, or any safe, vault, box, package, parcel or receptacle stands, nor  affect,  nor  bar  the right of such corporation to recover, before sale, any debt or claim due it or, after sale, so much of  the  debt  or claim as shall not be paid by the proceeds of the sale.  (g)  The  procedure  prescribed in this subdivision may be followed by any corporation winding up its affairs in accordance with the provisions of this section, notwithstanding the fact that such corporation may have commenced proceedings to open, or may have opened, any  safe,  vault  or box  for  non-payment  of  rental in accordance with other provisions of this chapter and notwithstanding the contents of  any  notice  that  may have  been  given by such corporation in accordance with any requirement of this section.   5. When such corporation shall have given the notice to creditors  and depositors to present their claims as prescribed in the order entered in accordance  with  the  provisions  of subdivision four hereof, and shall have paid all its debts and obligations for which a legal  claimant  has been  found,  and shall have complied with the provisions of subdivision four-a hereof, it shall, before applying to court  for  a  release  upon final  accounting  or  for a final order of dissolution, make a verified transcript or statement from its books of the names of  all  depositors, creditors,  stockholders,  shareholders,  owners of personal property in the custody or possession of such corporation as bailee, depositary  for hire  or  otherwise,  or lessees of any safe, vault or box, who have not claimed or have not received the deposits,  debts,  dividends,  interest balances  or  other  amounts due them, and shall file such transcript or statement  with  the  superintendent  together  with   all   identifying information,  including,  in  the case of unclaimed proceeds of any sale pursuant  to  subdivision  four-a  hereof,  a  certified  copy  of   the inventory,  and  an  affidavit showing compliance with the provisions of said subdivision, a list of the  articles  sold,  the  price  or  prices obtained  therefor, and the amount or amounts deducted and retained from the  proceeds  and  such  corporation  shall  thereupon  pay  over  such unclaimed  amounts  to  the  superintendent  as  trustee for the persons entitled to receive them, as provided in article two of this chapter.   6. Upon the petition of such corporation showing  (a) that all its debts and obligations  have  been  discharged  except those for which no legal claimant has been found,  (b) that notice was given to creditors and depositors to present their claims  as prescribed by the court and that any period prescribed by the court for the presentation of such claims has expired,  (c) that the provisions of subdivision four-a hereof,  if  applicable, have been complied with and  (d)  that all unclaimed amounts referred to in subdivision five hereof have been paid  over  to  the  superintendent,  and  on  notice  to  the comptroller  and the superintendent and such further notice as the court may prescribe, the court may, on such terms as justice requires, make an order affirming such disposition of such unclaimed amounts and declaring such corporation dissolved and its corporate existence terminated.   7. On filing with the superintendent a certified copy of the order  of dissolution described in the last preceding subdivision of this section, the corporation shall cease to exist.   8.  Unless  the  superintendent shall otherwise provide, any corporate banking organization that, pursuant to an agreement,  sells  or  conveys more than fifty per centum of its assets without the written approval of the  superintendent shall take the proceedings for voluntary dissolution  herein prescribed and, within six months from the date of such  sale  or conveyance,  shall  file with the superintendent a certified copy of the closing order in  the  form  prescribed  by  subdivision  four  of  this section.   The  corporate  banking  organization,  upon  making  written application to the superintendent for approval of the sale or conveyance of more than fifty per centum of its assets, shall pay an  investigation fee  as  prescribed pursuant to section eighteen-a of this chapter. If a closing order is required to be filed pursuant to this  subdivision  and such  order  is not filed within the time prescribed, the superintendent shall have the  power,  in  the  superintendent's  discretion,  to  take possession  of the business and property of such corporation and proceed with the liquidation thereof under the provisions of this article.   9. If the superintendent shall  certify  that  any  corporate  banking organization  is  deemed  by  him  to  have  abandoned and forfeited its charter by non-user and to be virtually in process of liquidation,  such corporation,  if  its  assets  have  a  value  at  least  equal  to  its liabilities, exclusive of any liability to shareholders or stockholders, as such, shall take the  proceeding  for  voluntary  dissolution  herein prescribed  and,  within  six  months from the date of such certificate, shall file with the superintendent a certified copy of the closing order in the form prescribed by subdivision four  of  this  section.  If  such order  is not filed within the time prescribed, the superintendent shall have the power, in his discretion, to take possession  of  the  business and  property  of  such  corporation  and  proceed  with the liquidation thereof under the provisions of this article.   10. (a) Upon the petition of the superintendent showing  (1) that any corporate banking organization  has  ceased  to  transact business,  or  has  commenced but failed to complete proceedings for its voluntary dissolution in accordance with the banking  law,  or  for  any other  reason  is  deemed  by  the  superintendent to have abandoned and forfeited its charter by non-user, and  (2) that all  of  its  assets  have  been  distributed,  or  that  the superintendent  has no knowledge as to the existence of any such assets, the  supreme  court  in  the  judicial  district  where   such   banking organization  maintained  its  principal  place  of business may make an order declaring such corporation dissolved and the  corporate  existence thereof terminated. Upon the filing of a certified copy of such order in the office of the superintendent the existence of such corporation shall cease and determine.  (b)  If  the petition of the superintendent shall show, in addition to the allegations required  by  the  provisions  of  subparagraph  (1)  of paragraph (a) of this subdivision, that such banking organization  (1) has undistributed assets and it appears that in the opinion of the superintendent  the  cost  of  taking possession of and liquidating such assets in accordance with the provisions of this article will exceed the fair value of such assets, and  (2) has failed, for a period of two years after  ceasing  to  transact business  or  commencing  proceedings  for its voluntary dissolution, to complete such proceedings  or  to  produce  proof  satisfactory  to  the superintendent  that  it  has  complied  with  or  is  in the process of complying with the provisions of the banking law, the  court  may,  upon such   notice  as  it  may  prescribe,  make  an  order  declaring  such corporation dissolved and the corporate  existence  thereof  terminated, and further declaring that such assets have been abandoned and providing for  the  payment, delivery or transfer thereof to the superintendent in such manner and at such time as the court may direct. Upon the filing of a certified copy of such order in the office of the  superintendent  the existence  of  such  corporation  shall cease and determine. At any time  within six months after the entry of such order, the court may upon good cause shown and upon such terms as justice may require, vacate or modify such order. At the expiration of such six-month period or  such  further period as the court may prescribe, the superintendent shall sell, redeem or  otherwise  dispose  of such assets and from the proceeds thereof may retain and pay all costs, disbursements and legal fees  allowed  by  the court  and  any  assessments,  penalties or forfeitures incurred by such banking organization under the banking law. The  remaining  proceeds  if any  shall  forthwith  be  paid  into the state treasury for the use and benefit of the state.   11. (a) Any  foreign  banking  corporation  which  has  been  licensed pursuant  to  article  two of this chapter to engage in business in this state, including any such corporation whose license has been surrendered or revoked, may, if it so desires, take proceedings  for  the  voluntary liquidation  of  its  business  and property in this state in accordance with the provisions of paragraph (b) of this subdivision;  but  no  such liquidation shall be commenced while the superintendent is in possession of  such  business and property unless such corporation shall have first received the  written  approval  of  the  superintendent.  In  any  such liquidation  the  claims of creditors of such corporation arising out of transactions had by them with its New York agency or agencies or  branch or  branches  shall  be accorded the same preference accorded to similar claims in a liquidation under subdivision four of  section  six  hundred six of this article.  (b)  To  effect  such  a  voluntary liquidation, a foreign corporation shall subscribe, acknowledge and file with  the  superintendent  at  his office  a  written notice of its intention so to liquidate, which notice shall specify the date of commencement of the liquidation, and upon such date, such corporation shall forthwith cease  to  transact  business  in this  state  if it has not already done so, and shall proceed to wind up its affairs in this state. Within thirty  days  after  such  date,  such corporation  shall  make  application  to  the  supreme court, after due notice to the superintendent, for an order prescribing the notice to  be given  to the preferred creditors hereinabove described to present their claims for payment. Every such corporation shall, in the course of  such liquidation, comply with the provisions of subdivisions four-a, five and six   of  this  section,  except  that  an  order  entered  pursuant  to subdivision six of this section shall  affirm  the  disposition  of  the unclaimed  amounts therein referred to and shall authorize the turn-over of all of the assets remaining after payment of the preferred  creditors to  the principal office of such corporation. Within five days after the making of any order described in this paragraph a certified copy thereof shall be filed in the office of the superintendent.  (c) Any foreign banking corporation which has been  licensed  pursuant to  article  two  of  this  chapter to engage in business in this state, which shall liquidate its business and property in  this  state  without electing to comply with the provisions of paragraphs (a) and (b) of this subdivision,  shall, upon completion of the liquidation, make a verified transcript or statement from its books of the  names  of  all  creditors whose  claims  arise  out  of transactions had by them with its New York agency or agencies, or its New York branch or branches and of all owners of personal property in the custody or  possession  of  such  agency  or agencies  or  branch  or  branches  as  bailee,  depositary  for hire or otherwise, who have not claimed or have not received the debts or  other amounts  due  them, and shall file such transcript or statement with the superintendent together with all identifying information, including,  in the  case of unclaimed proceeds of any sale of personal property, a list of the articles sold, the price or prices  obtained  therefor,  and  the  amount  or  amounts  deducted  and  retained from the proceeds, and such corporation shall thereupon pay  over  such  unclaimed  amounts  to  the superintendent  as  trustee for the persons entitled to receive them, as provided  in  article  two  of  this  chapter.  Any  such corporation so liquidating its business and property  in  this  state  may,  if  it  so desires,  follow the procedures for the disposition of personal property in the custody or possession  of,  and  exercise  the  same  powers  and privileges  with  respect  thereto accorded to, banking organizations in subdivision four-a of this section. To effectuate the purposes  of  this chapter,  the  superintendent  may  impose  additional  requirements and procedures for the foreign banking corporation to follow with respect to the dissolution of the licensed office.  (d)  For  the  purposes  of  this  subdivision,  the  words   "debts", "obligations"  and  "deposits", as used in subdivisions four-a, five and six of this section, shall be deemed to refer to  the  preferred  claims hereinabove  described,  the words "creditors" and "depositors" shall be deemed to refer to the owners of such preferred claims,  the  references in  subdivisions four-a and five of this section to the order entered in accordance with subdivision four of this  section  shall  be  deemed  to refer  to  the  like  order entered in accordance with the provisions of this subdivision, and, except when the context shall otherwise  require, the  word  "corporation" shall be deemed to refer to the New York agency or agencies, or branch or branches and the word "officer" shall  include the  agent  or other person in charge of such agency or agencies and any person in charge of or who is an officer of such branch or  branches  or of the liquidation.   12.  If  the  superintendent  shall  at  any time find that any of the reasons enumerated in section  six  hundred  six  of  this  article  for takeover  of  the  business and property of a banking organization or of the business and property in this state of a foreign banking corporation shall exist, he may, in his discretion,  forthwith  take  possession  of such  business  and  property  in accordance with the provisions of such section notwithstanding that such banking  organization  or  corporation may have theretofore commenced proceedings for the voluntary liquidation of such business and property in accordance with this section.