6.1-195.87 - (Repealed effective October 1, 2010) Dealings with self or affiliates.
§ 6.1-195.87. (Repealed effective October 1, 2010) Dealings with self oraffiliates.
A. Unless authorized by the governing instrument or by court order, fundsheld by an association as fiduciary shall not be invested in stock orobligations of, or property acquired from, the association or its affiliatesor their directors, officers or employees, or organizations in which theassociation or its affiliates or their officers, directors or employeespossess such an interest as might affect the exercise of the best judgment ofthe association in acquiring the stock, obligations or property.
B. Property held by an association as fiduciary shall not be sold ortransferred, by loan or otherwise, to the association or its affiliates ortheir directors, officers or employees, or to organizations in which theassociation or its affiliates or their officers, directors or employeespossess such an interest as might affect the exercise of the best judgment ofthe association in selling or transferring such property, except:
1. When lawfully authorized by the governing instrument or by court order;
2. In cases in which the association has been advised by its legal counsel inwriting that it has incurred, as fiduciary, a contingent or potentialliability, and the association desires to relieve itself from such liability,in which case such sale or transfer may be made with the approval of theboard of directors and the Commissioner, provided that in all such cases theassociation, upon the consummation of the sale or transfer, shall makereimbursement in cash at no loss to the trust account;
3. As provided in §§ 6.1-195.86 and 6.1-195.91; or
4. When required by the Commissioner.
C. If the retention of stock or obligations of the association or itsaffiliates is authorized by the governing instrument or court order, theassociation may exercise rights to purchase its own stock or the stock of itsaffiliates, or securities convertible into such stock, when such rights areoffered pro rata to all stockholders of the association or its affiliates, asthe case may be. When the exercise of such rights or the receipt of a stockdividend results in fractional shareholdings, additional fractional sharesmay be purchased to complement the fractional shares so acquired. Inelections of directors, shares of an association or its affiliates held bythe association as sole fiduciary, whether in its own name as fiduciary or inthe name of its nominee, may not be voted by the association or its nomineeunless, under the terms of the governing instrument or a court order, themanner in which such shares shall be voted may be directed by a donor orbeneficiary of the trust account, and the donor or beneficiary actuallydirects how the shares will be voted. In addition, where the association isacting as sole fiduciary with respect to a trust account containing votingshares of the association or its affiliates, the association may, inaccordance with the provisions of subsection B of § 6.1-195.88, petition acourt of the competent jurisdiction for appointment of a co-fiduciary for thepurpose of voting such shares.
(1984, c. 303.)