6-585

6-585. Involuntary dissolution

A. The superintendent may forthwith take possession and control of the business and
property of any credit union to which this chapter is applicable whenever he finds upon
examination or investigation that such credit union has committed one or more of the
following violations:

1. Is in violation of an order issued pursuant to section 6-137.

2. Is conducting its business in an unauthorized or unsafe manner or in violation
of the bylaws of the credit union.

3. Is insolvent.

4. Has an impairment of its capital.

5. Cannot with safety and expediency continue business.

6. Has suspended payment of its obligations.

7. Is, through its officers, refusing to submit its books, papers and records of
affairs for inspection to any examiner.

8. Is, through its officers, refusing to be examined regarding its affairs.

9. Has been examined by its own supervisory committee and the majority of the
committee requested in writing that the superintendent take possession and control.

10. In a proceeding for voluntary dissolution has, through its liquidating agent,
failed to make reasonable progress in the liquidation of its affairs and distribution of
its assets.

B. The superintendent upon taking possession and control of the credit union, its
business and operation, together with the furniture, fixtures, books, records and assets
of every description, shall determine whether it is practicable and feasible to
reorganize the credit union to continue in business or merge the credit union with
another operating credit union. If the superintendent determines that the credit union
cannot be reorganized, or merged with another operating credit union, he may permit the
credit union to operate under his direction and control, or if he determines that the
credit union should be liquidated through receivership, he shall petition the superior
court for authority to liquidate such credit union, and the superior court shall
immediately appoint the superintendent as the receiver of the credit union without bond,
and shall make such other orders, judgments and decrees as is necessary to liquidate such
credit union. The receiver shall take possession of and, for the purpose of
receivership, title to the books, records and assets of every description of such credit
union, shall proceed to collect all debts, dues and claims belonging to it, may sell or
compound all bad or doubtful debts and may sell the real and personal property of such
credit union, on such terms as the court may direct.

C. Such receiver may sue and defend in his own name with respect to the affairs,
assets, claims, debts, and choses in action of such credit union.

D. The receiver shall hold all records of such receivership for a period of two
years after the close of the receivership, and at the termination of the two years, the
records may then be destroyed.

E. All expenses of such receivership, including reasonable receiver and attorney
fees, shall be paid out of the assets of such credit union, and all expenses of any
preliminary or other examinations into the condition of any such credit union or
receivership, and all expenses incident to and in connection with the possession and
control of any credit union office, furniture and fixtures, books, records and assets of
every description of such credit union by the receiver for the purpose of reorganization
or liquidation through receivership, shall be paid out of the assets of such credit
union.

F. Notwithstanding the provisions of subsections A, B, C and D of this section,
when such credit union is a federally insured state credit union, the court shall first
tender the appointment as receiver to the national credit union administration, or any
succeeding organization, which is authorized to qualify and act without bond. If the
national credit union administration or succeeding organization accepts the appointment,
it shall have all of the powers, privileges and duties as such receiver provided by the
laws of this state.