§5-16-37. Conservatorship; involuntary liquidation.

(a) If the commissioner as a result of any examination or from any report made to him shall find that any association is violating the provisions of its certificate of incorporation or bylaws or the laws of this state or of the United States or any lawful order of the commissioner, or is conducting its business in an unsafe manner, he may, by an order, direct discontinuance of such violation or unsafe practice and conformance with all requirements of law. If an association shall refuse or neglect to comply with such order within the time specified therein, or if it shall appear to the commissioner that any association is in an unsafe condition or is conducting its business in an unsafe manner, or if he shall find that an impairment of capital exists to such an extent that it threatens loss to the members or if any association refuses to submit its books, papers and accounts to the inspection of the commissioner or his representative, the commissioner may appoint a conservator to take charge of the association and manage its business until the commissioner shall permit the board of directors to resume management of the business or shall reorganize the association, or until a receiver shall be appointed by the commissioner to liquidate its affairs. Any conservator appointed by the commissioner shall have all the rights, powers and privileges possessed by the officers, board of directors and members of the association. The directors and officers shall remain in office and the employees shall remain in their respective positions, but the conservator may remove any director, officer or employee, provided the order of removal of a director or officer shall be approved in writing by the commissioner. While the association is in charge of a conservator, members of such association shall continue to make payments to the association in accordance with the terms and conditions of their contracts, and the conservator, in his discretion, may permit account holders to repurchase their accounts from the association pursuant to the provisions of this chapter or under and subject to such rules and regulations as the commissioner may prescribe, and the conservator shall have power to accept payments on accounts, but any payments upon such accounts received by the conservator may be segregated if the commissioner shall so order in writing; and, if so ordered, such payments shall not be subject to offset and shall not be used to liquidate any indebtedness of such association existing at the time the conservator was appointed for it or any subsequent indebtedness incurred for the purpose of liquidating the indebtedness of any such association existing at the time such conservator was appointed. All expenses of the association during such conservatorship shall be paid by the association, including the salary of the conservator. The appointment of a conservator shall be evidenced by the commissioner's issuing of a certificate, under the seal of his office, delivered to the board of directors of the association, certifying that a conservator has been appointed pursuant to this section, and the compensation of such conservator shall be fixed by the commissioner with the approval of the Governor and shall be stipulated in the certificate. Within six months from the date upon which the conservator shall take charge of an association, the commissioner shall determine whether or not he shall restore the management of the association to the board of directors. Such determination shall be evidenced by the commissioner's certificate, under the seal of his office, delivered to the board of directors of the association, that the conservator forthwith is redelivering the management of the association to the board of directors of the association then in office. After the management of the association shall have been redelivered to the board of directors of an association, the association shall thenceforth be managed and operated as though no conservator had been appointed. At any time prior to the redelivery of the management to the board of directors, the commissioner shall determine whether such association shall be required to reorganize. Such determination shall be evidenced by the commissioner's certificate, under the seal of his office, delivered to the association, that unless the association reorganizes under the provisions of this chapter within a period of 90 days from the date of such certificate or within such further time as the commissioner shall approve, the commissioner will proceed to liquidate the association. If the association is an insured association, a signed and sealed copy of each certificate mentioned in this section shall be promptly sent by the commissioner by registered or certified mail to the Federal Savings and Loan Insurance Corporation, Washington, D.C.

(b) If the commissioner determines not to permit the association to resume business or to reorganize within the periods above specified, the commissioner shall, upon the date of such determination, appoint a receiver, which may be an agency or corporation created by the United States government, for such association for the purpose of liquidation, and shall fix the salary or compensation to be paid such receiver, his employees and counsel when such payments have had the approval of the Governor. The taking of possession by the receiver shall be evidenced by the commissioner's issuing of a certificate, under the seal of his office, delivered to the home office of the association, certifying that a receiver has been appointed to take possession of its property, business and assets pursuant to this section. A signed and sealed copy of such certificate shall be posted in a prominent place in the principal business entrance to the home office of the association simultaneously with the delivery of such certificate to the association. The posting of such certificate shall be notice generally that all dealings with the association shall thereafter be had through the receiver or his duly appointed agents so long as the receiver shall remain in the possession of the assets of the association. A signed and sealed copy of the certificate of the commissioner appointing a receiver of an association shall be recorded on the land record or register required by the laws of this state to be maintained for deeds to and liens upon real estate in each county or other political subdivision where real property in which the association has an interest is located. Upon such recordation of such order, all of the property of the association, including its rights, titles and interest in and to all property of whatsoever kind, whether real, personal or mixed, and things in action and every right, privilege, interest and asset of any conceivable value or benefit then existing or pertaining to it or which would inure to it shall immediately by act of law and without any conveyance or transfer and without any further act or deed become vested in and continue to be the property of the receiver of such association who shall have, hold and enjoy the same as receiver as fully and to the same extent as the same was possessed, held and enjoyed by the association of which he was appointed receiver. If the association is an insured association, a copy of such certificate shall be promptly forwarded by the commissioner by registered or certified mail, to the Federal Savings and Loan Insurance Corporation, Washington, D.C. In the liquidation of associations, a receiver shall have, in addition to the usual powers of receivers, all the powers specified in this chapter which inure to the board of directors of an association in dissolution in their capacity as trustees for liquidation. At any time prior to the completion of the liquidation of an association, the commissioner may by written order redeliver the property and assets of an association, or by such written order may reorganize such association and, upon the completion of such reorganization, redeliver its property and assets to the association. A signed and sealed copy of such order shall be recorded in the same manner and with the inverse effect as the certificate of the commissioner appointing a receiver, whereupon all of the property of the association shall become vested in it by operation of law. All expenses of liquidation, including the salaries of receiver or liquidating agents, shall be charged to the assets in liquidation, except the salaries of any employees of the Savings and Loan Bureau engaged in such liquidation and, further, except any salaries of any employees of the Federal Savings and Loan Insurance Corporation; provided, however, the expense incurred by the Savings and Loan Bureau in making the necessary audits of associations in liquidation shall be charged to the assets in liquidation. Upon completion of the liquidation of any association, the Savings and Loan Commissioner shall have an audit or report of examination of the affairs of the association made for the period the association has been in process of liquidation, and the cost of such audit shall be charged to the assets in liquidation, the original signed and sealed copy of such final audit or report of examination to be delivered to the State Savings and Loan Board. Upon acceptance for filing of such final report by the board, after hearing by said board, if it so elects, the receiver shall be discharged without further liability. Upon the acceptance for filing by the board of such final report, the receiver shall advise the Secretary of State, in writing, that the liquidation of the association involved is completed. The determination of the board with respect to such accounting and final report shall be final.

(c) If an association deems itself aggrieved by the action of the commissioner in taking possession of its property, business and assets for the purposes of conservatorship or receivership, it may appeal from such action in the manner as provided in Section 5-2A-63. No action taken by a conservator or a receiver while in office shall be invalidated by such appeal having been filed or by any order of the board. The filing of such an appeal shall not remove a conservator from the management of an association or a receiver from possession of the property and assets of an association during the pendency of such appeal. If the board shall disapprove the action of the commissioner in appointing a conservator or a receiver, it shall issue an order removing the conservator or receiver. Upon the delivery of such order of the board to the commissioner, the commissioner shall issue an order redelivering the association to the board of directors of the association then in office. A signed and sealed copy of such order of the commissioner redelivering the association to the board of directors shall be recorded on the land record or register in the manner and with the inverse effect provided in this section for the recordation of a certificate of the commissioner appointing a receiver, and upon such recordation all of the property of the association shall become vested in the association by operation of law.

(Acts 1939, No. 459, p. 616; Code 1940, T. 5, §249; Acts 1943, No. 98, p. 100.)