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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










 

§

17502. Assumption of liabilities

(a) Assumption

of liabilities. Subject to the approval of the Commissioner, any Vermont

financial institution may, by contract, assume all or any part of the deposit

and other liability of any other financial institution or financial

institutions and may accept in payment or part payment for the obligations so

assumed, all or any part of the assets of the other financial institution; or

may so accept in payment or part payment, the notes or other undertakings of the

other financial institution, secured by a pledge to the assuming financial

institution, or secured by any other lien or trust for its benefit, with

respect to all or any part of the assets of the other financial institution or

financial institutions, at least equal in value to the amount of the deposit

liability assumed. Such contracts of assumption, notes, undertakings, liens, or

trust agreements may be in any form approved by the Commissioner which provides

for equality of treatment of all depositors and for the full payment of all

assumed deposits on demand. All depositors whose deposits are so assumed shall

be notified by mail of the assumption and any depositor objecting thereto

within 60 days of that notice shall be paid the full amount of the assumed deposit,

with interest to the date of the objection, computed at the proportional part

of the interest rate to be paid for that period by the Vermont financial

institution on other deposits, or if no rate has been determined, at the rate

for the interest period next preceding the notice, not to exceed the rate

prescribed by the directors for the then current period, if a rate has been so

prescribed for the period.

(b) Contracts

for assumption of deposit liability. Contracts for the assumption of deposit

liability may be entered into independently of merger of financial institutions

or as a part of any such merger, and the Commissioner may authorize under the

provisions of chapter 205 of this title the assuming financial institution to

establish a branch at any location at which the other financial institution

might have conducted its business. However, such a contract shall not be valid

unless the governing bodies of the signatory financial institutions have been

authorized in regard thereto by a vote of the investors or mutual voters of the

financial institutions. That authorization requires the affirmative vote, in

the case of a mutual or cooperative financial institution, of a majority of the

mutual voters, and in the case of an investor-owned financial institution,

requires the vote provided in its organizational documents for amending the

charter and in any event, at least the affirmative vote of a majority of the

equity interests, as well as the affirmative vote of a majority of each class

of equity interest present and voting at the meeting. All classes of equity

interests may vote on the question whether or not the rights of any class to

vote generally have been suspended under the terms of the charter by reason of

nonpayment of dividends. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1,

2001.)