Louisiana Administrative Code › Title 10 - FINANCIAL INSTITUTIONS, CONSUMER CREDIT, INVESTMENT SECURITIES AND UCC › Part VII - Savings Banks › Chapter 3 - Conversions › Section VII-315 - Liquidation Account

Current through Register Vol. 50, No. 6, June 20, 2024
A. Requirement.
				At the time of conversion, each applicant shall establish a liquidation account
				in an amount equal to the amount of net worth of the converting savings bank
				prior to conversion. The applicant shall use the net worth figure no later than
				that set forth in its latest statement of financial condition contained in the
				final offering circular. The function of the liquidation account is to
				establish a priority on liquidation and, except as provided in §319 B,
				the existence of the liquidation account shall not restrict the use or
				application of any of the net worth accounts of the converted savings
				bank.
B. Purpose. The liquidation
				account shall be maintained by the savings bank for the benefit of eligible
				account holders and supplemental eligible account holders who maintain their
				deposit accounts in the converted savings bank. Each eligible account holder
				and supplemental eligible account holder shall, with respect to each deposit
				account held, have a related inchoate interest in a portion of the liquidation
				account balance ("subaccount").
C.
				Distribution. In the event of a complete liquidation of the converted savings
				bank, each eligible account holder and supplemental eligible account holder
				shall be entitled to receive a liquidation distribution from the liquidation
				account, in the amount of the then current adjusted subaccount balances for
				deposit accounts held, before any liquidation distribution may be made with
				respect to capital at the time of the conversion in exchange for the surrender
				of mutual capital certificates issued by the applicant prior to conversion. A
				merger, consolidation, sale of bulk assets or similar combination or
				transaction with another institution is not considered a complete liquidation
				for these purposes, and in this kind of transaction, the liquidation account
				shall be assumed by the surviving depository institution. Preferred stock
				issued in exchange for mutual capital certificates may receive distributions in
				liquidation prior to distribution from the liquidation account to the holders
				of the mutual capital certificates that would have been entitled to priority
				over the residual rights of depositors had the savings bank not been converted
				as of the date of liquidation.
D.
				Calculating Individual Distributions. The initial subaccount balance for a
				deposit account held by an eligible account holder and/or supplemental eligible
				account holder shall be determined by multiplying the opening balance in the
				liquidation account by a fraction of which the numerator is the amount of
				qualifying deposits in such savings account on the eligibility record date and
				the denominator is the total amount of qualifying deposits of all eligible
				account holders and supplemental eligible account holders in the converting
				savings bank on such dates. For deposit accounts in existence at both dates,
				separate subaccounts shall be determined on the basis of the qualifying
				deposits in such accounts on the record dates. The initial subaccount balances
				shall not be increased, and it shall be subject to downward adjustment under
				Subsection E of this Section.
E.
				Account and Subaccount Balances
1.
a. If the balance in any deposit account of
				an eligible account holder or supplemental eligible account holder at the close
				of business on any annual closing date subsequent to the respective record
				dates is less than the lesser of:
i. the
				balance in the deposit account at the close of business on any other annual
				closing date subsequent to the eligibility record date or supplemental
				eligibility record date; or
ii. the
				amount of qualifying deposit as of the eligibility record date or the
				supplemental eligibility record date;