2023 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.