CO Code § 11-103-802 (2021)
2021 Colorado Code|Title 11 - Financial Institutions|Article 103 - Organization and Corporate Functions|Part 8 - Liquidation, Dissolution, and Reorganization|§ 11-103-802. Involuntary Liquidation by Banking Board - Reorganization

     Except as otherwise provided in this code, only the banking board may take possession of a state bank if, after a hearing before the banking board, the banking board finds: The bank's capital is inadequate or it is otherwise in an unsound condition; the bank's business is being conducted in an unlawful or unsound manner; the bank is unable to continue normal operations; examination of the bank has been obstructed or impeded; or control of the bank has been assumed by any person or persons convicted of fraud or a felony in this state or any other jurisdiction, or by any partnership, association, or corporation controlled, directly or indirectly, by any person so convicted, unless the banking board determines that such person has been duly rehabilitated or otherwise that the bank will be honestly and efficiently managed.    Notice of hearing shall be mailed by first class mail to the bank and the directors of the bank no less than ten days prior to the hearing. Any proceedings conducted pursuant to this subsection (1) shall be exempt from any provision of law requiring that proceedings of the banking board be conducted publicly.         The commissioner, upon order of the banking board, shall take possession by posting upon the premises a notice reciting that the commissioner is assuming possession pursuant to this code and the time, not earlier than the posting of the notice, when his or her possession shall be deemed to commence. A copy of the notice shall be filed in the district court in and for the county in which the bank 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 taking possession of any state bank that is a member of the federal deposit insurance corporation.    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, including legal counsel; to execute any instrument in the name of the bank; to commence, defend, and conduct in its name any action or proceeding to which it may be a party; to terminate such possession by restoring the bank to its board of directors; and to reorganize or liquidate the bank in accordance with this code. As soon as practicable after taking possession, the commissioner shall make an inventory of the assets and file a copy thereof with the court in which the notice of possession was filed.    When the commissioner is in possession and while the commissioner's possession continues, there shall be a postponement, until six months after such taking, of the date upon which any period of limitation fixed by statute or agreement would otherwise expire on a claim or right of action of the bank, or upon which a review must be taken, or a pleading, or other document must be filed, by the bank in any pending action or proceeding.         If the banking board determines, after hearing before the banking board, to liquidate the state bank, it shall give notice of its determination by posting upon the premises a notice reciting that the determination has been made to liquidate the bank. A copy of the notice shall be filed in the district court in and for the county in which the bank is located. The commissioner, upon order of the banking board, shall tender to the federal deposit insurance corporation or its successor the appointment as liquidator under section 11-103-805.    If, in the opinion of the banking board, an emergency exists that may result in serious losses to the depositors, it may take possession of a state bank and may immediately appoint the federal deposit insurance corporation or its successor as liquidator in accordance with section 11-103-805 without notice of a hearing. Notice of the banking board's emergency determination shall be posted and filed in the same manner as prescribed in paragraph (a) of this subsection (3). Within ten days after the banking board's emergency determination, the bank or the directors of the bank may file an application with the banking board to rescind its determination. The filing of an application shall not act as a stay of the banking board's action pursuant to this subsection (3). The banking board shall grant the application if it finds that its action was unauthorized and shall rescind its action taking possession and restore the bank to its board of directors. If no application is filed within ten days after the banking board's emergency determination, all action taken by the banking board shall be final.    Notice of hearing shall be mailed by first class mail to the bank and the directors of the bank no less than ten days prior to the hearing. Any proceeding conducted pursuant to this subsection (3) shall be exempt from any provision of law requiring that proceedings of the banking board be conducted publicly.    If the federal deposit insurance corporation or its successor does not accept the tender of appointment as liquidator, the banking board as liquidator shall proceed to liquidate the institution, upon first providing a bond executed by some surety company authorized to do business in this state, running to the people of the state of Colorado, that meets with the approval of the banking board, for the faithful discharge of its duties in connection with such liquidation and the accounting for all moneys coming into its hands. The cost of such bond shall be paid from the assets of the bank. Suit may be maintained on such bond by any person injured by a breach of conditions thereof.    If the commissioner determines to reorganize the state bank or if the banking board, after staying its liquidation, orders such reorganization, the commissioner, after according a hearing to all interested persons, shall enter an order proposing a reorganization plan. A copy of the plan shall be sent to each depositor and creditor who shall not receive payment of his or her claim in full under the plan, together with notice that, unless within fifteen days the plan is disapproved in writing by persons holding one-third or more of the aggregate amount of such 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.       No judgment, lien, or attachment shall be executed upon any asset of the state bank while it is in the possession of the banking board. Upon the election of the banking board, in connection with a liquidation or reorganization:   Any lien or attachment, other than an attorney's or mechanic's lien, obtained upon any asset of the state bank during the banking board's possession, or within four months prior to commencement thereof, shall be vacated and voided, except liens created by the banking board while in possession and further excepting liens or security interests obtained by the federal reserve bank;    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.       With the approval of the banking board, the commissioner may borrow money in the name of the state bank and may pledge its assets as security for the loan.    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.     History. Source: L. 2003: Entire article added with relocations, p. 1101, § 3, effective July 1.    Editor's note:   This section is similar to former § 11-5-102 as it existed prior to 2003.