§412:3-617 Voluntary cessation of business;
dissolution. (a) Except for a credit union, a solvent Hawaii financial
institution whose capital is not impaired and which has not received a notice
of charges and proposed suspension or revocation order pursuant to section
412:2-312 may cease its business and dissolve if the institution shall have
complied with applicable federal law and the following requirements and
conditions:
(1) The board of directors shall adopt a resolution
adopting a plan of liquidation and dissolution and recommending that the
financial institution be dissolved, and directing that the question of the
dissolution be submitted to the commissioner for approval, and, if approved, to
a vote of the shareholders or members, which vote may be at either an annual or
special meeting. The plan of liquidation and dissolution shall include, but
not be limited to, provisions for the orderly payment or assumption of the
institution's deposits and other liabilities and for transfer or assumption of all
trust, agency, and other fiduciary relationships and accounts;
(2) Within five business days after the meeting of
the board of directors described in paragraph (1), the financial institution
shall file an application with the commissioner pursuant to section 412:3-603
for approval to cease business and dissolve. The application shall be
accompanied by a copy of the plan of liquidation and dissolution certified by
two executive officers of the financial institution to have been duly adopted
by the board and any other information that the commissioner may require. A
copy of the notice shall be delivered contemporaneously to the financial
institution's federal insurer;
(3) The commissioner shall approve the application to
cease business and dissolve if the commissioner is satisfied that the
depositors, beneficiaries, and creditors will be adequately protected under the
plan, the institution is not insolvent or in danger of becoming insolvent, that
its capital is not impaired and is not in danger of becoming impaired, and that
no other reason exists to deny the application. The commissioner may impose
any restrictions and conditions as the commissioner deems appropriate;
(4) Upon receipt of the commissioner's approval to
cease business and dissolve, the financial institution shall proceed with the
dissolution in accordance with the procedures, conditions, and requirements
for, and with the effect of, a voluntary dissolution by act of corporation
pursuant to chapter 414, except that the vote by shareholders or members to
approve the dissolution shall satisfy the requirements of section 412:3-604;
and
(5) Any financial institution whose capital is
impaired or in danger of becoming impaired, and any institution which is
insolvent or in danger of becoming insolvent, may not undergo a voluntary
dissolution.
(b) Subject to the approval of the
commissioner, a solvent credit union whose capital is not impaired and which
has not received a notice of charges and proposed order of suspension or
revocation pursuant to section 412:2-312 may elect to dissolve voluntarily and
liquidate its affairs in the manner prescribed in this section:
(1) The board of directors shall adopt a resolution
adopting a plan of liquidation and dissolution, recommending the voluntary
dissolution of the credit union, and directing that the question of the
dissolution be submitted to the commissioner for approval and, if approved,
requesting that the liquidation question be submitted to the members. The plan
of liquidation and dissolution shall include but not be limited to provisions
for the orderly payment or assumption of the credit union's deposits, shares,
and other liabilities;
(2) Not later than ten days after the meeting of the
board of directors described in paragraph (1), the credit union shall file an
application with the commissioner pursuant to section 412:3-603, for approval
to cease business and dissolve. The application shall be accompanied by a copy
of the plan of liquidation and dissolution certified by two executive officers
of the credit union to have been duly adopted by the board and shall include
any other information that the commissioner may require. A copy of the notice
shall be delivered contemporaneously to any government agency or other
organization insuring member accounts thereof, in writing, setting forth the
reasons for the proposed liquidation;
(3) The commissioner shall approve the application to
cease business and dissolve if the commissioner is satisfied that the
depositors, beneficiaries, and creditors will be adequately protected under the
plan, the credit union is not insolvent or in danger of becoming insolvent, its
capital is not impaired and is not in danger of becoming impaired, and no other
reason exists to deny the application. The commissioner may impose any
restrictions and conditions as the commissioner deems appropriate;
(4) Upon receipt of the commissioner's approval to
cease business and dissolve and as soon as the board of directors decides to
submit the liquidation question to the members, all business affairs of the
credit union, including but not limited to payments on and withdrawals of
shares, share certificates, share drafts, deposits, and deposit certificates,
(except for the transfer of shares or deposits to loans and interest), the
making of investments of any kind (other than short-term investments), and the
issuing of loans, shall be suspended until the members act on the liquidation
question. Upon approval by the members, all business transactions of the
credit union shall be permanently discontinued. Transfer of deposits or shares
to loans and interest, collection of loans and interest, and the payment of
necessary expenses of operation shall continue upon authorization by the board
of directors or the liquidating agent during liquidation;
(5) An affirmative majority vote by the members by
ballot, in person, by letter, or other written communication, is necessary for
a credit union to enter into voluntary liquidation. Whenever authorization for
liquidation is to be obtained at a meeting of the members, notice in writing
shall be given to each member, by first-class mail, at least ten days prior to
the meeting;
(6) Not later than ten days after the members act on
the liquidation question, the chairperson of the board of directors shall
notify the commissioner and any government agency or other organization
insuring member accounts, in writing, of the action of the members on the
liquidation question;
(7) A liquidating credit union shall remain in
existence for the purpose of discharging its debts, collecting its loans,
distributing its assets, and any other necessary functions in order to conclude
its business. A liquidating credit union may sue or be sued for the purpose of
enforcing its debts and obligations until its affairs are complete;
(8) The board of directors or the liquidating agent
who may be the insurer shall use the assets of the credit union to pay:
(A) First, the expenses incidental to
liquidation including any surety bonds required during liquidation;
(B) Second, any liability due to nonmembers;
(C) Third, the deposits and deposit
certificates of the members of the credit union; and
(D) Fourth, the remaining assets shall be
distributed to the members in proportion to the number of shares held by each
member on the date dissolution was approved by the members;
(9) When the board of directors or the liquidating
agent determines that all assets of the credit union having a reasonable
expectancy of realization have been liquidated and distributed as provided in
this section, the board or the liquidating agent, whichever is applicable,
shall complete a certificate of dissolution on a form prescribed by the
commissioner. Upon the completion of the certificate, the board or the
liquidating agent, whichever is applicable, shall file the certificate with the
commissioner for the complete dissolution and liquidation of the credit union;
and
(10) Any credit union whose capital is impaired or in
danger of becoming impaired, and any credit union that is insolvent or in
danger of becoming insolvent, may not undergo a voluntary dissolution.
(c) Subject to the approval of the
commissioner, a nondepository financial services loan company may voluntarily
cease activity for which a license to operate as a financial services loan
company is required by this chapter, in the manner prescribed as follows:
(1) The board of directors shall adopt a resolution
approving a plan to cease activity for which a license to operate as a
financial services loan company is required. If applicable, the plan shall
include but not be limited to provisions for the sale, exchange, or disposition
of all loans or other business for which a financial services loan company
license is required by this chapter;
(2) The nondepository financial services loan company
shall file an application with the commissioner pursuant to section 412:3-603
for approval to cease activity for which a license to operate as a financial
services loan company is required. The application shall be accompanied by:
(A) A copy of the plan to cease activity for
which a license to operate as a financial services loan company is required,
certified by two executive officers of the nondepository financial services
loan company, to have been duly adopted by the board;
(B) The information required in an application
filed pursuant to section 412:3-613, if applicable; and
(C) Any other information that the
commissioner may require;
(3) The commissioner shall approve the application to
cease activity for which a license to operate as a financial services loan
company is required if:
(A) The commissioner is satisfied with the
plan;
(B) The conditions for approval contained in
section 412:3-613 have been met, if applicable; and
(C) No other reason exists to deny the
application;
provided that the commissioner may impose any
restrictions and conditions as the commissioner deems appropriate; and
(4) Upon receipt of the commissioner's approval, a
nondepository financial services loan company that has filed a plan attesting
that the company does not retain any loans or other business for which a
financial services loan company license is required by this chapter, shall
forthwith surrender to the commissioner all of its financial services loan
company licenses. A nondepository financial services loan company that has
filed a plan that includes provisions for the sale, exchange, or disposition of
loans or other business, upon receipt of the commissioner's approval, shall
proceed with its plan to cease activity for which a license to operate as a
financial services loan company is required. Upon completion of its plan, the
nondepository financial services loan company shall file a written notification
with the commissioner. The written notification shall be accompanied by the surrender
of all of its financial services loan company licenses.
(d) Nothing in this section shall preclude the
commissioner at any time from appointing a receiver or conservator for the
financial institution pursuant to this chapter, or from seeking any relief or
sanction from the circuit court that may otherwise be permitted by law. [L
1993, c 350, pt of §1; gen ch 1993; am L 1994, c 107, §15; am L 1999, c 245,
§5; am L 2001, c 170, §6; am L 2002, c 40, §28]
Rules of Court
Receivers, see HRCP rule 66.
