State Codes and Statutes

State Codes and Statutes

Statutes > California > Fin > 4879.01-4879.17

FINANCIAL CODE
SECTION 4879.01-4879.17



4879.01.  In this article, unless the context otherwise requires,
"sale" means any of the sales described in Section 4879.02.



4879.02.  With the approval of the commissioner:
   (a) A bank may sell a partial business unit to a California state
bank pursuant to (1) this article, (2) in case the seller is a
national banking association or a California federally licensed
foreign (other nation) bank, federal law, (3) in case the seller is a
foreign bank, the law of the foreign bank's domicile, and (4) in
case the partial business unit is located outside this state, the law
of the place where the partial business unit is located.
   (b) A California state bank may sell a partial business unit to
another California state bank, a national banking association, or an
insured foreign (other state) state bank, pursuant to (1) this
article, (2) in case the purchaser is a national banking association,
federal law, (3) in case the purchaser is an insured foreign (other
state) state bank, the law of the foreign bank's domicile, and (4) in
case the partial business unit is located outside this state, the
law of the place where the partial business unit is located. However,
this subdivision does not apply to any sale of the type defined in
Section 4877.01.
   (c) A California state bank may sell a partial business unit
located outside this state to a foreign (other nation) bank pursuant
to (1) this article, (2) the law of the foreign bank's domicile, and
(3) the law of the place where the partial business unit is located.
   (d) An industrial loan company may sell a partial business unit to
a California industrial loan company pursuant to (1) this article,
(2) in case the seller is a foreign (other state) industrial loan
company, the law of the foreign industrial loan company's domicile,
and (3) in case the partial business unit is located outside this
state, the law of the place where the partial business unit is
located.
   (e) A California industrial loan company may sell a partial
business unit to an insured industrial loan company pursuant to (1)
this article, (2) in case the purchaser is an insured foreign (other
state) industrial loan company, the law of the foreign industrial
loan company's domicile, and (3) in case the partial business unit is
located outside this state, the law of the place where the partial
business unit is located. However, this subdivision does not apply to
any sale of the type defined in Section 4877.01.
   (f) A depository corporation of any class may sell a partial
business unit to a California state depository corporation of another
class pursuant to (1) this article, (2) in case the seller is a
federal depository corporation, federal law, (3) in case the seller
is a foreign (other state) state depository corporation or foreign
(other nation) depository corporation, the law of the foreign
depository corporation's domicile, and (4) in case the partial
business unit is located outside this state, the law of the place
where the partial business unit is located.
   (g) A California state depository corporation of any class may
sell a partial business unit to a federal depository corporation of
another class or an insured foreign (other state) state depository
corporation of another class pursuant to (1) this article, (2) in
case the purchaser is a federal depository corporation, federal law,
(3) in case the purchaser is an insured foreign (other state) state
depository corporation, the law of the foreign depository corporation'
s domicile, and (4) in case the partial business unit is located
outside this state, the law of the place where the partial business
unit is located. However, this subdivision does not apply to any sale
of the type defined in Section 4877.01.
   (h) A depository corporation may sell a partial business unit
located in this state to a California state-licensed foreign (other
nation) bank pursuant to (1) this article, (2) in case the seller is
a federal depository corporation or a California federally licensed
foreign (other nation) bank, federal law, (3) in case the seller is a
foreign depository corporation, the law of the foreign depository
corporation's domicile, and (4) the law of the purchaser's domicile.
   (i) A California state-licensed foreign (other nation) bank may
sell a partial business unit located in this state to a California
state depository corporation, a federal depository corporation, an
insured foreign (other state) state depository corporation, another
California state-licensed foreign (other nation) bank, or a
California federally licensed foreign (other nation) bank pursuant to
(1) this article, (2) in case the purchaser is a federal depository
corporation or a California federally licensed foreign (other nation)
bank, federal law, (3) in case the purchaser is a foreign depository
corporation, the law of the foreign depository corporation's
domicile, and (4) the law of the seller's domicile.
   (j) A California state depository corporation may sell a partial
business unit located in this state to a California federally
licensed foreign (other nation) bank pursuant to (1) this article,
(2) federal law, and (3) the law of the purchaser's domicile.
   (k) A California federally licensed foreign (other nation) bank
may sell a partial business unit located in this state to a
California state depository corporation pursuant to (1) this article,
(2) federal law, and (3) the law of the seller's domicile.



4879.03.  A seller and purchaser shall make an agreement of sale,
providing:
   (a) That the seller shall sell to the purchaser, and the purchaser
shall purchase from the seller, a partial business unit, describing
it.
   (b) Other provisions as may be appropriate.



4879.04.  The agreement of sale shall be approved by the seller and
purchaser, as follows:
   (a) In the case of a California state depository corporation:
   (1) If, as of the time when the agreement of sale is made, the
deposits, if any, of the partial business unit are less than 10
percent of the total deposits of the state depository corporation and
the fiduciary assets, if any, of the partial business unit are less
than 10 percent of the total fiduciary assets of the state depository
corporation, the agreement of sale shall be approved by the board of
the state depository corporation.
   (2) Otherwise, the agreement of sale shall be approved by the
board of the state depository corporation, and the principal terms of
the agreement of sale shall be approved by the outstanding shares of
the state depository corporation.
   (3) For purposes of paragraphs (1) and (2):
   (A) The amount of deposits shall be determined as of the end of
the calendar quarter immediately preceding the making of the
agreement of sale.
   (B) The value of fiduciary assets shall be the net carrying value,
as determined in conformity with generally accepted accounting
principles, as of the end of the calendar quarter immediately
preceding the making of the agreement of sale.
   (b) In the case of a depository corporation other than a
California state depository corporation, the agreement of sale shall
be approved as required by the law of the depository corporation's
domicile.



4879.05.  (a) Any amendment to an agreement of sale shall be
approved by the seller and purchaser, as follows:
   (1) In the case of a California state depository corporation, by
the board of the corporation, and, if the principal terms of the
agreement of sale were required to be approved by the outstanding
shares of the corporation under Section 4879.04 and if the amendment
changes any of the principal terms of the agreement of sale, by the
outstanding shares of the corporation.
   (2) In the case of a depository corporation other than a
California state depository corporation, as required by the law of
the depository corporation's domicile.
   (b) If an agreement of sale is amended and if the amendment is
approved as required by subdivision (a), the agreement of sale, as
thus amended, constitutes the agreement of sale.



4879.06.  In the case of a seller or purchaser that is a California
state depository corporation, any approval of the outstanding shares
of the corporation required by Section 4879.04 or 4879.05 may be
given before or after the approval of the board of the depository
corporation.



4879.07.  In obtaining any approval of outstanding shares required
for an agreement of sale, a purchaser or seller that is a California
state depository corporation and, in any case where the purchaser is
a California state depository corporation that is to issue securities
in consideration of the sale, the seller shall each provide to its
shareholders information as the commissioner may require. In
determining the information to be required, the commissioner shall
give due consideration to regulations relating to proxy statements
issued under Section 14 of the Securities Exchange Act of 1934 (15
U.S.C. Sec. 78n) by (a) the Securities and Exchange Commission, (b)
in the case of a depository corporation that is a bank, the federal
bank regulatory agencies, and (c) in the case of a depository
corporation that is a savings association, the Office of Thrift
Supervision.


4879.08.  A purchaser or seller that is a California state
depository corporation, with the approval or its board and without
further approval of the outstanding shares, may, and any other
purchaser or seller, with approval as may be required under the law
of its domicile, may, in its discretion, abandon the sale at any time
before the sale becomes effective, subject to the contractual
rights, if any, of other parties, including the seller or purchaser,
as the case may be.


4879.09.  A purchaser or seller that is a California state
depository corporation or California state-licensed foreign (other
nation) bank, shall file the following with the commissioner:
   (a) A copy of the agreement of sale.
   (b) An officers' certificate of the purchaser, certifying that the
agreement of sale has been approved by the purchaser as required by
Sections 4879.04 and 4879.05.
   (c) An officers' certificate of the seller, certifying that the
agreement of sale has been approved by the seller as required by
Sections 4879.04 and 4879.05.
   (d) An application for approval of the sale.



4879.10.  (a) In case the purchaser is either, and the seller is not
either, a California state depository corporation or California
state-licensed foreign (other nation) bank, if the commissioner finds
all of the following with respect to an application for approval of
a sale, he or she shall approve the application:
   (1) That the sale will not result in a monopoly and will not be in
furtherance of any combination or conspiracy to monopolize or to
attempt to monopolize the banking, savings association, or industrial
loan business in any part of this state.
   (2) That the sale will not have the effect in any section of this
state of substantially lessening competition, tending to create a
monopoly, or otherwise being in restraint of trade, or that the
anticompetitive effect is clearly outweighed in the public interest
by the probable effect of the sale in meeting the convenience and
needs of the community to be served.
   (3) That the shareholders' equity of the purchaser will be
adequate and that the financial condition of the purchaser will be
satisfactory.
   (4) That the directors and executive officers of the purchaser
will be satisfactory.
   (5) That the purchaser will afford reasonable promise of
successful operation and that it is reasonable to believe that the
purchaser will be operated in a safe and sound manner and in
compliance with all applicable laws.
   (6) That the sale will be fair, just, and equitable. For purposes
of this paragraph, in the case of any term of the sale that has been
determined by agreement between the seller and the purchaser in an
arm's length transaction, the commissioner shall find that the term
is fair, just, and equitable to the seller and the purchaser.
   (7) In the case of a sale where the seller is a California savings
association, that the sale will not have a seriously adverse effect
on the total availability of financing for housing in any market area
of the seller in this state or that any effect of that type is
clearly outweighed in the public interest by the probable effect of
the sale in meeting the convenience and needs of the community to be
served. Nothing in this subdivision authorizes the commissioner to
require the purchaser to make financing for housing available.
   If the commissioner finds otherwise, he or she shall deny the
application for approval of the sale.
   (b) In case the seller is either, and the purchaser is not either,
a California state depository corporation or a California
state-licensed foreign (other nation) bank, if the commissioner finds
all of the following with respect to an application for approval of
a sale, he or she shall approve the application:
   (1) That the sale will not have a seriously adverse effect on the
safety or soundness of the seller.
   (2) That the sale will be fair, just, and equitable. For purposes
of this subdivision, in the case of any term of the sale that has
been determined by agreement between the seller and the purchaser in
an arm's length transaction, the commissioner shall find that the
term is fair, just, and equitable to the seller and the purchaser.
   If the commissioner finds otherwise, he or she shall deny the
application for approval of the sale.
   (c) In case the seller and the purchaser are each either a
California state depository corporation or a California state
depository corporation or a California state-licensed foreign (other
nation) bank, if the commissioner finds all of the factors set forth
in subdivisions (a) and (b) with respect to an application for
approval of a sale, the commissioner shall approve the application.
If the commissioner finds otherwise, the commissioner shall deny the
application.



4879.11.  After an application for approval of a sale has been
approved by the commissioner and all conditions precedent to the sale
have been fulfilled, the commissioner shall approve the agreement of
sale and endorse the approval on the original or a copy of the
agreement of sale, and at that time the sale shall become effective
for all purposes.



4879.12.  When a sale becomes effective, in case the purchaser is a
California state depository corporation or California state-licensed
foreign (other nation) bank:
   (a) Unless the purchaser provided otherwise in the application for
approval of the sale or unless the commissioner provided otherwise
in the approval of the application:
   (1) The purchaser may establish equivalent offices at any branch
offices, places of business, extensions of offices, and other
facilities of the seller transferred in the sale.
   (2) If the seller was authorized to transact trust business and if
the partial business unit sold includes any trust business, the
purchaser, if it is a California state bank or savings association,
may transact trust business.
   (b) The commissioner shall issue to the purchaser certificates of
authority, licenses, and other authorizations as may be necessary to
carry out the provisions of subdivision (a).



4879.13.  In case a seller is a California state commercial bank and
sells all of its trust business in a sale:
   (a) As of the time when the sale becomes effective, the
commissioner shall issue to the seller certificates of authority
authorizing it to transact commercial banking business in replacement
of the certificates of authority that the seller is required to
surrender pursuant to subdivision (b).
   (b) Promptly after the sale becomes effective, the seller shall
surrender to the commissioner for cancellation its certificates of
authority authorizing it to transact commercial banking business and
trust business.


4879.14.  When a sale becomes effective:
   (a) The purchaser shall succeed, without other transfer, to all
rights and property of the seller which are sold to the purchaser
under the agreement of sale.
   (b) The purchaser shall assume in the same manner as if the
purchaser had itself incurred such debts and liabilities, and shall
be subject to, all debts and liabilities of the seller transferred to
the purchaser under the agreement of sale.
   (c) All rights of creditors of the seller and all liens upon the
property of the seller shall be preserved unimpaired.
   (d) Any action or proceeding pending by or against the seller
which was sold or transferred to the purchaser under the agreement of
sale may be prosecuted to judgment, which shall bind the purchaser,
or the purchaser may be proceeded against or substituted in place of
the seller.
   (e) (1) In case the partial business unit sold includes trust
business, the purchaser shall succeed, without further transfer, to
the rights, obligations, properties, assets, investments, deposits,
demands, agreements, and trusts of the seller under all trusts,
executorships, administrations, guardianships, agencies, and all
other fiduciary or representative capacities sold to the purchaser
under the agreement of sale, to the same extent as if the purchaser
had originally assumed the fiduciary or representative capacities.
   (2) In case the partial business unit sold constitutes all or
substantially all the trust business of the seller, the purchaser
shall, in addition, be entitled to take and execute the appointment
to all executorships, trusteeships, guardianships, and other
fiduciary or representative capacities to which the seller is or may
be named in wills, whenever probated, or to which the seller is or
may be named or appointed by any other instrument.



4879.15.  No action on account of any debt or liability assumed by a
purchaser in a sale may be commenced against the seller more than
one year after the time when the sale becomes effective.



4879.16.  Promptly after a sale becomes effective, the seller shall:
   (a) Surrender to its regulator for cancellation the certificates
of authority or licenses issued to it by the regulator that relate to
the partial business unit sold.
   (b) File with its regulator any report regarding the sale that the
regulator may require.



4879.17.  (a) After a sale becomes effective, the commissioner shall
issue, upon application, a certificate under his or her official
seal, stating that the seller sold a partial business unit to the
purchaser, describing the business unit, and specifying the time at
which the sale became effective.
   (b) Any certificate pursuant to subdivision (a) shall be prima
facie evidence of the fact of the sale and of the regularity of the
proceedings taken for the sale and shall be conclusive evidence of
the matters in favor of any innocent purchaser or encumbrancer for
value.