81-12-181 - Appointment of conservator; powers and privileges; directors, officers and employees to remain; effect on deposits, withdrawals and loans.
§ 81-12-181. Appointment of conservator; powers and privileges; directors, officers and employees to remain; effect on deposits, withdrawals and loans.
(1) If the commissioner, as a result of any examination or from any report made to him, believes that the public interest may be served by the appointment of a conservator, and if he shall find that: (a) the capital of an association is impaired, or (b) the association is concealing any assets, books or records, or (c) the members of such association are in actual danger of loss due to mismanagement, misappropriation of funds, fraud, violation of this chapter, or violation of any lawful rule of the commissioner, or (d) any association is in violation of an order or injunction, as authorized by this section, which has become final in that time to appeal has expired without appeal or a final order entered from which there can be no appeal, the commissioner may appoint a conservator for such association, which may be the commissioner or any other person, and upon such appointment shall apply immediately to the chancery court in the county in which the home office of t he association is located for confirmation of such appointment, and such court shall have exclusive jurisdiction to determine the issues and all related matters. Such proceedings shall be given precedence over other cases pending in such court, and shall in every way be expedited. Such court shall confirm such appointment if it shall find that one or more of such grounds exist, and a certified copy of the order of the court confirming such appointment shall be evidence thereof. Such conservator shall have the power and authority provided in this chapter and such other power and authority as may be expressed in the order of the court. Such conservator shall endeavor promptly to remedy the situations complained of by the commissioner in his application for confirmation of such appointment. Within six (6) months of the date of such appointment, or within twelve (12) months if the court shall extend such period of six (6) months, such association shall be returned to the board of directors thereof and thereafter shall be managed and operated as if no conservator had been appointed, or a receiver shall be appointed as hereinafter provided. If the commissioner or examiner is appointed conservator, he shall receive no additional compensation, but if another person is appointed, then the compensation of the conservator, as determined by the court, shall be paid by the association. A certified copy of the order of the court discharging such conservator and returning such association to the directors thereof shall be sufficient evidence thereof.
(2) Any conservator appointed shall have all the rights, powers and privileges possessed by the officers, board of directors and members of the association and shall have the power, with the approval of the court, to limit or condition withdrawals from the association and to effectuate a system for payment of withdrawals.
(3) The directors and officers shall remain in office and the employees shall remain in their respective positions, but the conservator may remove any director, officer or employee, provided the order of removal of a director or officer shall be approved in writing by the commissioner.
(4) While the association is in the charge of a conservator, members or borrowers of such association shall continue to make payments to the association in accordance with the terms and conditions of their contracts, and the conservator, in his discretion, may permit savings account members or savings account holders to withdraw their accounts from the association pursuant to the provisions of this chapter. The conservator shall have power to accept savings accounts and additions to savings accounts, but any such amounts received by the conservator may be segregated if the commissioner shall so order in writing; if so ordered, such amounts shall not be subject to offset and shall not be used to liquidate any indebtedness of such association existing at the time the conservator was appointed for it or any subsequent indebtedness incurred for the purposes of liquidating the indebtedness of any such association existing at the time such conservator was appointed. All expenses of the association during such conservatorship shall be paid by the association.
Sources: Laws, 1977, ch. 445, § 55(2-5); reenacted, 1982, ch. 301, § 91; Laws, 1990 Ex Sess, ch. 52, § 93; Laws, 1993, ch. 441, § 94; reenacted and amended, 1994, ch. 622, § 126; reenacted without change, Laws, 1997, ch. 496, § 91; reenacted without change, Laws, 2001, ch. 488, § 93, eff from and after July 1, 2001.