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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

207

:
MERGER, SHARE EXCHANGE, CONSOLIDATIONS, AND ACQUISITIONS






Subchapter

005
:
ACQUISITION OF ASSETS; ASSUMPTION OF LIABILITIES










 

§

17501. Acquisition of assets

(a) General. A

Vermont financial institution may acquire the assets of, or assume the

liabilities of, any other financial institution authorized to do business in

this State. When the value of an acquisition or assumption is worth 25 percent

or more of the assets of the acquiring, assuming, or transferring entity, the

transaction shall be subject to and in accordance with the procedures, and

subject to the conditions and limitations, set forth in this subchapter.

(b) Adoption of

plan. The governing body of the acquiring or assuming institution and the

governing body of the transferring institution shall adopt by majority vote a

plan for acquisition, assumption, or sale on terms that are mutually agreed

upon. The plan shall include:

(1) the names

and types of the institutions involved;

(2) a statement

setting forth the material terms of the proposed acquisition, assumption, or

sale, including, if applicable, the plan for disposition of all assets and

liabilities not subject to the plan;

(3) a statement

that the entire transaction is subject to written approval of the Commissioner

and, if the transaction involves all or substantially all of the assets or

liabilities of the transferring institution, the approval of the transferring

institution's investors or mutual voters;

(4) if an

investor-owned institution is the transferring institution and the proposed

sale is not for cash, a clear and concise statement that investors of the

institution voting against the proposed sale are entitled to rights set forth

in subdivision 17101(c)(2) of this title; and

(5) the proposed

effective date of the acquisition, assumption, or sale and all other

information and provisions that are necessary to execute the transaction or

that are required by the Commissioner.

(c)

Commissioner's approval. The Commissioner shall approve the plan of merger or

consolidation in accordance with subsection 17101(b) of this title.

(d) Vote of

investors or mutual voters. If the transaction involves all or substantially

all of the assets or liabilities of the transferring institution or if the

transferring institution's organizational documents require, the plan of

acquisition, assumption, or sale shall be presented to the investors or mutual

voters of the transferring institution for their approval, and their approval

shall be obtained in accordance with subsection 17101(c) of this title. If the

approval of investors is required, then investors dissenting to the transaction

have the rights set forth in subdivision 17101(c)(2) of this title.

(e) Executed

plan; certificate; effective date.

(1) If the plan

is approved by the investors or mutual voters of the transferring institution,

an executive officer and the secretary of such institution shall submit the

executed plan to the Commissioner, together with a copy of the resolution of

the investors or mutual voters approving it, each certified by these officers.

(2) Upon receipt

of the items set forth in subdivision (1) of this subsection and evidence that

the participating institutions have complied with all applicable federal law

and regulations, the Commissioner shall certify, in writing, to the

participants that the plan has been approved and is in compliance with the

provisions of this title.

(3)

Notwithstanding approval of the investors or mutual voters or certification by

the Commissioner, the transferring institution's governing body may, in its

discretion, abandon such a transaction without further action or approval by

the investors or mutual voters, subject to the rights of third parties under

any contracts relating to the transaction.

(f) National

financial institution as participant. If one of the participants in a

transaction under this section is a national financial institution, all

participants shall comply with such requirements as may be imposed by federal

law for such an acquisition, assumption, or sale and provide evidence of such

compliance to the Commissioner; provided that if the purchasing or assuming

institution is a national financial institution, approval by the Commissioner

is not required.

(g)

Investor-owned institution acquiring mutual or cooperative financial

institution. A mutual or cooperative financial institution may not sell all or

substantially all of its assets to an investor-owned institution without prior

approval by the Commissioner of a plan that provides fair and equitable

treatment of the depositors or members in the sale of the assets and

distribution of the proceeds.

(h)

Applicability to transactions in ordinary course of business. This subchapter

does not apply to a transfer of assets of a financial institution in the

ordinary course of business that does not include any assumption of deposit

liabilities.

(i) Authority

for expedited acquisitions. Notwithstanding any other provision of law, or any

organizational document of any participating institution, the Commissioner may

order that the acquisition of assets and assumption of liabilities become

effective immediately if the Commissioner determines that the action is

necessary for the protection of depositors or the public. This action may be

taken upon receipt of the following:

(1) certified

copies of the authorizing resolutions adopted by the respective governing

bodies of the acquiring or assuming financial institution or financial institution

holding company, and a copy of the plan of acquisition of assets and assumption

of liabilities approved by a majority vote of the governing bodies of the

acquiring or assuming financial institution or financial institution holding

company and the transferring institution; or

(2) notice,

containing information required by the Commissioner, from any other person of

intent to acquire the assets and assume the liabilities of a financial

institution or financial institution holding company.

(j) The applicant

in any acquisition application filed with another supervisory agency by a

financial institution holding company that controls a Vermont financial

institution, or by a person that intends to acquire a Vermont financial

institution or financial institution holding company shall file a copy of the

application with the Commissioner at the time the application is filed with the

other supervisory agency. The applicant shall notify the Commissioner of any

amendments to the application by filing with the Commissioner a copy of any

amendments that are required to be filed with the other supervisory agency. A

copy of any acquisition approval issued by the other supervisory agency shall

be filed with the Commissioner by the applicant within 30 days of its issuance.

The Commissioner shall not disclose any information obtained pursuant to this

section which is treated as confidential by the other supervisory agency.

(Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)