§412:3-617  Voluntary cessation of business;dissolution.  (a)  Except for a credit union, a solvent Hawaii financialinstitution whose capital is not impaired and which has not received a noticeof charges and proposed suspension or revocation order pursuant to section412:2-312 may cease its business and dissolve if the institution shall havecomplied with applicable federal law and the following requirements andconditions:

(1)  The board of directors shall adopt a resolutionadopting a plan of liquidation and dissolution and recommending that thefinancial institution be dissolved, and directing that the question of thedissolution be submitted to the commissioner for approval, and, if approved, toa vote of the shareholders or members, which vote may be at either an annual orspecial meeting.  The plan of liquidation and dissolution shall include, butnot be limited to, provisions for the orderly payment or assumption of theinstitution's deposits and other liabilities and for transfer or assumption of alltrust, agency, and other fiduciary relationships and accounts;

(2)  Within five business days after the meeting ofthe board of directors described in paragraph (1), the financial institutionshall file an application with the commissioner pursuant to section 412:3-603for approval to cease business and dissolve.  The application shall beaccompanied by a copy of the plan of liquidation and dissolution certified bytwo executive officers of the financial institution to have been duly adoptedby the board and any other information that the commissioner may require.  Acopy of the notice shall be delivered contemporaneously to the financialinstitution's federal insurer;

(3)  The commissioner shall approve the application tocease business and dissolve if the commissioner is satisfied that thedepositors, beneficiaries, and creditors will be adequately protected under theplan, the institution is not insolvent or in danger of becoming insolvent, thatits capital is not impaired and is not in danger of becoming impaired, and thatno other reason exists to deny the application.  The commissioner may imposeany restrictions and conditions as the commissioner deems appropriate;

(4)  Upon receipt of the commissioner's approval tocease business and dissolve, the financial institution shall proceed with thedissolution in accordance with the procedures, conditions, and requirementsfor, and with the effect of, a voluntary dissolution by act of corporationpursuant to chapter 414, except that the vote by shareholders or members toapprove the dissolution shall satisfy the requirements of section 412:3-604;and

(5)  Any financial institution whose capital isimpaired or in danger of becoming impaired, and any institution which isinsolvent or in danger of becoming insolvent, may not undergo a voluntarydissolution.

(b)  Subject to the approval of thecommissioner, a solvent credit union whose capital is not impaired and whichhas not received a notice of charges and proposed order of suspension orrevocation pursuant to section 412:2-312 may elect to dissolve voluntarily andliquidate its affairs in the manner prescribed in this section:

(1)  The board of directors shall adopt a resolutionadopting a plan of liquidation and dissolution, recommending the voluntarydissolution of the credit union, and directing that the question of thedissolution be submitted to the commissioner for approval and, if approved,requesting that the liquidation question be submitted to the members.  The planof liquidation and dissolution shall include but not be limited to provisionsfor 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 theboard of directors described in paragraph (1), the credit union shall file anapplication with the commissioner pursuant to section 412:3-603, for approvalto cease business and dissolve.  The application shall be accompanied by a copyof the plan of liquidation and dissolution certified by two executive officersof the credit union to have been duly adopted by the board and shall includeany other information that the commissioner may require.  A copy of the noticeshall be delivered contemporaneously to any government agency or otherorganization insuring member accounts thereof, in writing, setting forth thereasons for the proposed liquidation;

(3)  The commissioner shall approve the application tocease business and dissolve if the commissioner is satisfied that thedepositors, beneficiaries, and creditors will be adequately protected under theplan, the credit union is not insolvent or in danger of becoming insolvent, itscapital is not impaired and is not in danger of becoming impaired, and no otherreason exists to deny the application.  The commissioner may impose anyrestrictions and conditions as the commissioner deems appropriate;

(4)  Upon receipt of the commissioner's approval tocease business and dissolve and as soon as the board of directors decides tosubmit the liquidation question to the members, all business affairs of thecredit union, including but not limited to payments on and withdrawals ofshares, share certificates, share drafts, deposits, and deposit certificates,(except for the transfer of shares or deposits to loans and interest), themaking of investments of any kind (other than short-term investments), and theissuing of loans, shall be suspended until the members act on the liquidationquestion.  Upon approval by the members, all business transactions of thecredit union shall be permanently discontinued.  Transfer of deposits or sharesto loans and interest, collection of loans and interest, and the payment ofnecessary expenses of operation shall continue upon authorization by the boardof directors or the liquidating agent during liquidation;

(5)  An affirmative majority vote by the members byballot, in person, by letter, or other written communication, is necessary fora credit union to enter into voluntary liquidation.  Whenever authorization forliquidation is to be obtained at a meeting of the members, notice in writingshall be given to each member, by first-class mail, at least ten days prior tothe meeting;

(6)  Not later than ten days after the members act onthe liquidation question, the chairperson of the board of directors shallnotify the commissioner and any government agency or other organizationinsuring member accounts, in writing, of the action of the members on theliquidation question;

(7)  A liquidating credit union shall remain inexistence for the purpose of discharging its debts, collecting its loans,distributing its assets, and any other necessary functions in order to concludeits business.  A liquidating credit union may sue or be sued for the purpose ofenforcing its debts and obligations until its affairs are complete;

(8)  The board of directors or the liquidating agentwho may be the insurer shall use the assets of the credit union to pay:

(A)  First, the expenses incidental toliquidation including any surety bonds required during liquidation;

(B)  Second, any liability due to nonmembers;

(C)  Third, the deposits and depositcertificates of the members of the credit union; and

(D)  Fourth, the remaining assets shall bedistributed to the members in proportion to the number of shares held by eachmember on the date dissolution was approved by the members;

(9)  When the board of directors or the liquidatingagent determines that all assets of the credit union having a reasonableexpectancy of realization have been liquidated and distributed as provided inthis section, the board or the liquidating agent, whichever is applicable,shall complete a certificate of dissolution on a form prescribed by thecommissioner.  Upon the completion of the certificate, the board or theliquidating agent, whichever is applicable, shall file the certificate with thecommissioner for the complete dissolution and liquidation of the credit union;and

(10)  Any credit union whose capital is impaired or indanger of becoming impaired, and any credit union that is insolvent or indanger of becoming insolvent, may not undergo a voluntary dissolution.

(c)  Subject to the approval of thecommissioner, a nondepository financial services loan company may voluntarilycease activity for which a license to operate as a financial services loancompany is required by this chapter, in the manner prescribed as follows:

(1)  The board of directors shall adopt a resolutionapproving a plan to cease activity for which a license to operate as afinancial services loan company is required.  If applicable, the plan shallinclude but not be limited to provisions for the sale, exchange, or dispositionof all loans or other business for which a financial services loan companylicense is required by this chapter;

(2)  The nondepository financial services loan companyshall file an application with the commissioner pursuant to section 412:3-603for approval to cease activity for which a license to operate as a financialservices loan company is required.  The application shall be accompanied by:

(A)  A copy of the plan to cease activity forwhich a license to operate as a financial services loan company is required,certified by two executive officers of the nondepository financial servicesloan company, to have been duly adopted by the board;

(B)  The information required in an applicationfiled pursuant to section 412:3-613, if applicable; and

(C)  Any other information that thecommissioner may require;

(3)  The commissioner shall approve the application tocease activity for which a license to operate as a financial services loancompany is required if:

(A)  The commissioner is satisfied with theplan;

(B)  The conditions for approval contained insection 412:3-613 have been met, if applicable; and

(C)  No other reason exists to deny theapplication;

provided that the commissioner may impose anyrestrictions and conditions as the commissioner deems appropriate; and

(4)  Upon receipt of the commissioner's approval, anondepository financial services loan company that has filed a plan attestingthat the company does not retain any loans or other business for which afinancial services loan company license is required by this chapter, shallforthwith surrender to the commissioner all of its financial services loancompany licenses.  A nondepository financial services loan company that hasfiled a plan that includes provisions for the sale, exchange, or disposition ofloans or other business, upon receipt of the commissioner's approval, shallproceed with its plan to cease activity for which a license to operate as afinancial services loan company is required.  Upon completion of its plan, thenondepository financial services loan company shall file a written notificationwith the commissioner.  The written notification shall be accompanied by the surrenderof all of its financial services loan company licenses.

(d)  Nothing in this section shall preclude thecommissioner at any time from appointing a receiver or conservator for thefinancial institution pursuant to this chapter, or from seeking any relief orsanction from the circuit court that may otherwise be permitted by law. [L1993, 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.