6.1-194.32:1 - (Repealed effective October 1, 2010) Reorganization of mutual association into mutual holding compa...
§ 6.1-194.32:1. (Repealed effective October 1, 2010) Reorganization of mutualassociation into mutual holding company; approval by Commissioner; powers;issuance of stock.
A. Notwithstanding any other provision of law, with the approval of theCommissioner, and in accordance with the provisions of this section and anyregulations promulgated pursuant to this section, any mutual association mayreorganize to become a mutual holding company by:
1. Causing a stock association to be formed by incorporating a stockcorporation and obtaining a certificate of authority to begin business as asavings institution pursuant to the provisions of Chapter 9 (§ 13.1-601 etseq.) of Title 13.1 and Article 2 (§ 6.1-194.8 et seq.) of this chapter; and
2. Transferring the substantial part of its assets and liabilities, includingall of its deposit liabilities, to the stock association created, in exchangefor receipt of no less than fifty-one percent of the capital stock of thestock association; and
3. Adopting an amended charter changing its name and conforming itsorganization, governance and powers to those prescribed hereunder for amutual holding company.
B. In connection with the transfer of assets and liabilities, the resultingmutual holding company may retain assets to the extent such assets are notrequired to be transferred to the stock association created in order tosatisfy any capital or reserve requirements imposed by applicable state orfederal law.
C. Upon such transfer, all persons who prior thereto held depository rightswith respect to or other rights as creditors of the reorganized mutualassociation shall have such rights solely with respect to the stockassociation created, and the corresponding liability or obligation of thereorganized mutual association to such persons shall be assumed by the stockassociation. Persons who prior thereto had any ownership, liquidation orvoting rights with respect to the reorganized mutual association, in theircapacities as savings depositors, and pursuant to provision of law, orpursuant to the articles of incorporation and bylaws of that association,shall continue to have such rights but solely with respect to the mutualassociation in its reorganized form as a mutual holding company. Theownership or liquidation interest of any savings depositor of the subsidiarystock association in the net earnings and net worth of the resulting mutualholding company, and the voting rights of any such depositor in the mutualholding company, shall terminate, or otherwise be limited, in the same mannerand on the happening of the same events as was the case prior thereto withthe interest held by that depositor in the mutual association.
D. The reorganization of a mutual association into a mutual holding companyshall be conducted in a manner that is equitable to all parties. The boardof directors of the mutual association shall first adopt by a two-thirds votea plan of reorganization, the provisions of which shall comply withrequirements set forth in regulations promulgated by the Commission. Suchplan shall provide that holders of savings deposits in the reorganized mutualassociation shall be afforded an opportunity to preserve their interests bysubscribing to the minority stock of the subsidiary stock association. TheCommissioner shall approve any such plan of reorganization if theCommissioner ascertains that the reorganization shall not have an adverseeffect on the stability of the association and that the reorganized mutualassociation has complied with all laws and regulations of the Commissionrelating to the reorganization of a mutual association into a mutual holdingcompany. The Commission shall adopt regulations governing the procedures tobe followed in completing the reorganization after the Commission hasapproved a plan of reorganization. Such regulations shall ensure that thesubsidiary association resulting from such reorganization shall continue tohave its accounts insured by the Federal Deposit Insurance Corporation orother federal insurance agency.
E. Upon reorganization, the resulting mutual holding company (i) shallcontinue to possess and may exercise all the rights, powers and privileges,except deposit-taking powers, of a mutual association under the laws of thisCommonwealth, and (ii) shall be subject to the limitations and restrictionsimposed on savings institution holding companies by § 6.1-194.87, as well asall limitations and restrictions applicable to mutual savings institutions.
F. Upon reorganization, the association chartered as a stock corporationshall have the power to issue to persons other than the mutual holdingcompany of which it is a subsidiary, an amount of common stock which in theaggregate does not exceed forty-nine percent of the issued and outstandingcommon stock of the association. For purposes of this percentage limitation,any issued and outstanding securities that are convertible into common stockshall be considered as issued and outstanding common stock. If at any time,the mutual holding company resulting from reorganization sells or otherwisedisposes of outstanding shares in its stock association subsidiary, and as aresult such mutual holding company no longer owns more than fifty-one percentof the outstanding shares of such association, or if the subsidiary stockassociation sells substantially all of its assets in a transaction in whichsubstantially all deposit liabilities of such association are assumed andbecome liabilities of the purchaser of those assets, the Commission, onapplication of the Commissioner, may, after reasonable notice to the mutualholding company and its subsidiary stock association, appoint a receiver towind up the affairs of the mutual holding company.
G. Any mutual holding company having its principal place of business in thisCommonwealth may convert into a stock savings institution holding company,with the approval of the Commissioner, and in accordance with any regulationspromulgated by the Commission.
(1989, c. 205; 1990, c. 3.)