2023 New York Laws › BNK - Banking › Article 13 - Merger; Voluntary Dissolution; Superintendent's Taking Possession; Reorganization; Liquidation › 605-A - Transfer of Deposit Liabilities of Bank or Trust Company; Sale or Pledge of Assets to Facilitate Such Transfer.

§ 605-a.  Transfer  of  deposit  liabilities of bank or trust company;
  sale or pledge of assets to facilitate such transfer. 1. A bank or trust
  company may, pursuant to a plan approved by  the  superintendent,  enter
  into  an  agreement  with  another  bank  or  trust company, whereby its
  liabilities to depositors will be assumed by such other  bank  or  trust
  company. To facilitate the consummation of such plan and agreement, such
  bank  or  trust  company  may  borrow  money  from  the  Federal Deposit
  Insurance Corporation and pledge all  or  any  part  of  its  assets  as
  security  for  the  money so borrowed, or it may sell all or any part of
  its assets to Federal Deposit Insurance Corporation  and  the  money  so
  borrowed  or realized with or without any other assets belonging to such
  bank or trust company, may be transferred by it to such  other  bank  or
  trust  company, in consideration of the latter's agreement to assume and
  pay the deposit liabilities of the former. If the  superintendent  shall
  thereafter  take possession of the business and property of such bank or
  trust company, pursuant to this article, the validity of a claim against
  such bank or trust company which was in existence  when  such  plan  was
  consummated  and  remains  unpaid  shall  be  determined pursuant to the
  provisions of section six hundred  twenty  to  six  hundred  twenty-five
  inclusive  of this article as though such plan had not been consummated.
  Nothing in this section nor in any plan  consummated  pursuant  to  this
  section  shall be deemed to require allowance of any claim if such claim
  would not otherwise be allowable in the liquidation proceedings. If such
  claim is allowed or ultimately established, the owner thereof  shall  be
  entitled  to  dividends  on  his  claim as though such plan had not been
  consummated, and as though the assets of such bank or trust company  had
  been taken over for liquidation immediately prior to any sale, pledge or
  transfer  made  pursuant  to such plan. If such bank or trust company in
  liquidation does not have sufficient other assets to pay such dividends,
  the  deficiency  shall  be  paid  from  the  proceeds  of  the  sale  or
  liquidation  of the assets sold or pledged by such bank or trust company
  to  Federal  Deposit  Insurance  Corporation.  If  such  proceeds  prove
  insufficient  to  pay  such deficiency in full, any remaining deficiency
  shall be paid from the proceeds of the sale or liquidation of the assets
  transferred by such bank or trust company to such other  bank  or  trust
  company,  exclusive  of cash representing the proceeds of a sale to or a
  loan from Federal  Deposit  Insurance  Corporation.  The  superintendent
  shall  take  such  action  as he shall deem necessary and appropriate to
  protect the interests of the owner of any such claim, but he  shall  not
  be  required to obtain possession of any of the assets from the proceeds
  of which the deficiency in dividends upon such claim is payable,  unless
  it  shall  appear  that  the  amount  required  for  the payment of such
  deficiency is not otherwise available. The superintendent  may,  subject
  to  the approval of the supreme court in the judicial district where the
  principal office of such bank or trust company is located, enter into an
  agreement with the Federal Deposit Insurance Corporation and the bank or
  trust company to which any assets of such bank  or  trust  company  have
  been  transferred,  or either of them, whereby payments shall be made to
  him as trustee for the benefit of the person or persons entitled thereto
  from time to time as cash is realized from the sale  or  liquidation  of
  the  assets  from  the  proceeds  of  which  claims are payable. If such
  agreement is approved by the supreme court, after notice of a kind which
  the court deems to be adequate to all persons whose  interests,  in  the
  opinion  of  the court, may be affected thereby, such agreement shall be
  binding upon all such persons. No action may  be  brought  by  any  such
  person  to  enforce payment of his claim unless it be clearly shown that
  the  superintendent  has  refused  or  failed  to  take  necessary   and
  appropriate  action  to  protect  the interests of such person. No sale,

  conveyance or transfer by a bank or trust company of all or any part  of
  its  assets shall be deemed to have been made pursuant to the provisions
  of this section unless the plan approved  by  the  superintendent  shall
  expressly so state. Nothing contained in this section shall be deemed to
  repeal,  limit,  modify or otherwise affect any right or power of a bank
  or trust company to sell, convey or transfer all  or  any  part  of  its
  assets pursuant to any other provision of law.
2. A bank or trust company assuming the deposit liabilities of another
  bank or trust company in connection with a plan pursuant to this section
  may  issue  preferred  shares  which,  to  the  extent  permitted by the
  superintendent, may have a  retirable  value  greater  than  the  amount
  received in payment for such shares.