32-1-506. Assessment on capital stock to make good impairment.
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/mt/title-32/chapter-1/part-5/32-1-506·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
32-1-506 . Assessment on capital stock to make good impairment.
(1)When the department determines that an impairment of capital exists in a bank, the department may notify the board of directors of the bank by written notice that the impairment exists, stating the amount of the impairment in dollars and percentage of the capital stock. The department may order the board to make good the impairment within 90 days from date of the notice.
(2)The board of directors shall, upon receipt of notice, convene and pass a resolution reciting the receipt of the notice of impairment and calling a special meeting of the stockholders of the bank in the manner provided in their bylaws.
(3)The stockholders at the meeting shall pass a resolution reciting the facts of receipt of notice from the department, notice of impairment, and notice of meeting and assessing themselves by assessing the stock of record. Payment of the assessment must be made within the time limit specified by the department in the notice of impairment.
(4)If there is any stock remaining on which the assessment is not paid as provided in this section, the stock or a part of the stock that is necessary to pay the assessment must be sold by the board of directors, acting through the cashier or secretary of the bank, at public or private sale, as appears best for all concerned, not less than 30 days after the day fixed for payment of assessment.
(5)Notice of the time and place of the sale must be given by common courier with tracking capability to the stockholders by the board through the bank's cashier or secretary at least 14 days prior to the sale.
(6)A sale of stock as provided in this section causes an absolute cancellation of the outstanding certificate or certificates evidencing the stock sold and makes them void in the hands of the stockholder or the stockholder's assigns or pledgees.
(7)The bank shall issue a new certificate:
(a)to the purchaser for the number of shares purchased; and
(b)to the stockholder of record. The new certificate must be delivered to the purchaser, stockholder, or any pledgee or assignee of the stock for the remaining shares, if any.
(8)The record of the original certificate sold must be marked canceled on the records of the bank, and that record is prima facie evidence of the regularity of the proceedings for the sale of the stock.
(9)If a bank fails to make good its capital impairment on demand of the department, as provided in this section, the department may immediately take charge of that bank and proceed to liquidate it as in the case of insolvency.
(10)If the stock does not sell for enough to pay the assessment that is owed, the board of directors may sue in the name of the corporation to collect the deficiency from the stockholder of record whose stock has been sold for the assessment.