17-5550. Same; reorganization plan.
17-5550
17-5550. Same; reorganization plan.
The plan of reorganization may provide for reincorporation under the
existing name of the association or under a different name. In addition to
all other lawful provisions, the plan may provide for the exchange of
shares in the association for shares of the reorganized association.
Without limiting the generality of the methods by which an association may
reorganize, any association may: (a) Transfer title to any of its assets to
a new association organized under this act solely to liquidate such assets
in an orderly manner. Such liquidating association shall be in dissolution
and shall dissolve in accordance with the provisions of this act. Unless
the commissioner shall otherwise approve, the board of directors of the
reorganizing association shall be the board of directors of the liquidating
association. The liquidating association shall pay the reorganizing
association for the assets acquired the aggregate book value of such assets
on the books of the reorganizing association by issuing pro rata and
delivering to the shareholders of the reorganizing association shares of an
aggregate participation value equal to the aggregate book value of assets
so acquired. The participation value of the shares of the reorganizing
association shall be written down in an amount equal to the participation
value of the account of such shareholder in the liquidating association.
Title to the assets transferred to the liquidating association pursuant to
this section shall vest in the liquidating association by operation of law
with the same legal effect as provided in this act in the case of merger.
(b) Set up a "participating reserve" by transferring thereto the aggregate
book value of any assets of the association. The participation value of the
shares of the association then outstanding shall be reduced pro rata by an
aggregate amount equal to the aggregate book value of assets so transferred
to the participating reserve. The association shall issue pro rata to such
shareholders nonrepurchasable "participating reserve accounts" of an
aggregate participation value equal to the aggregate book value of assets
transferred to the participating reserve. The assets so represented by the
participating reserve shall be identified on the books of the association
as participating reserve assets and the aggregate book value of such assets
as shown by the participating reserve shall be reported on any balance
sheet of the association opposite the item "participating reserve assets"
and such assets shall be and remain a separate fund from the other assets
of the association for the sole use and benefit of the holders of
participating reserve accounts. In such event, the directors shall have
with respect to the liquidation of the participating reserve assets all the
powers set forth in this act. As and when the participating reserve assets
are liquidated, all proceeds therefrom shall be paid pro rata from time to
time as the board of directors may determine to the holders of
participating reserve accounts at the option of the board of directors
either in cash or by credit upon an account of the association. If the
proceeds of the final liquidation of participating reserve assets do not
equal the participation value of participating reserve accounts, the loss
shall be absorbed pro rata by the holders of participating reserve accounts
and the association shall have no further liability in relation thereto or
arising therefrom. (c) Reduce its liability to each of its shareholders pro
rata to the amount credited to each such shareholder on the books of the
association in such manner as to distribute the loss equally among such
shareholders whenever the losses of an association resulting from the
depreciation in value of its assets or otherwise are such as to result in
an impairment of capital.
History: L. 1943, ch. 133, § 128; July 1.