Wisconsin Administrative Code › Department of Financial Institutions › DFI-SB 1-22 - Department of Financial Institutions-Savings Banks › Chapter DFI-SB 21 - Conversion From Mutual To Stock Institution › Section DFI-SB 21.13 - Liquidation account

Current through June 24, 2024
(1) REQUIREMENT. At the time of conversion,
				each savings bank shall establish a liquidation account in an amount equal to
				the amount of net worth of the savings bank prior to conversion. The savings
				bank shall use the net worth figure established 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 s.
				DFI-SB 21.14
				(2), the existence of the liquidation account
				shall not restrict the use or application of any of the accounts of the savings
				bank.
(2) PURPOSE. The liquidation
				account shall be maintained for the benefit of eligible account holders and
				supplemental eligible account holders who maintain their deposit accounts. 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").
(3) 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 for deposit accounts held, in the
				amount of the date of complete liquidation subaccount balances adjusted under
				subs. (4) and (5) before any liquidation distribution may be made with respect
				to capital at the time of the conversion in exchange for the surrender of any
				mutual capital certificates issued in accordance with
				12 CFR
				563.74 by the institution prior to
				conversion. A merger, consolidation, sale of bulk assets, or similar
				combination or transaction with another FDIC-insured institution is not
				considered a complete liquidation, and in this kind of transaction, the
				liquidation account shall be assumed by the surviving institution. Preferred
				stock issued in exchange for mutual capital certificates may receive
				distributions in a 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 deposit account holders had
				the savings bank not been converted as of the date of liquidation.
(4) CALCULATING INDIVIDUAL DISTRIBUTIONS. The
				initial subaccount balance for a deposit account held by an eligible account
				holder 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 the savings account
				on the eligibility record date or the supplemental 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
				institution on those dates. For deposit accounts in existence on both dates,
				separate subaccounts shall be determined on the basis of the qualifying
				deposits in the accounts on the appropriate record date. The initial subaccount
				balances shall not be increased, and they shall be subject to downward
				adjustment under sub. (5).
(5)
				ACCOUNT AND SUBACCOUNT BALANCES.
(a)
				Subparagraph (b) applies if the balance in any deposit account of an eligible
				account holder or supplemental eligible account holder at the close of business
				on any fiscal year's last day subsequent to the respective record dates is less
				than the lesser of:
1. The balance in the
				deposit account at the close of business on any other fiscal year's last day
				subsequent to the eligibility record date or supplemental eligibility record
				date; or
2. The amount of
				qualifying deposit as of the eligibility record date or the supplemental
				eligibility record date.