Termination of trusteeship under security instruments upon insolvency; appointment of successor trustee by petition to district court or pursuant to security instrument.
1. Except as otherwise provided in subsection 2, if any bank created under the laws of this state has been or is appointed trustee in any indenture, deed of trust or other instrument of like character, executed to secure the payment of any bonds, notes or other evidences of indebtedness, is taken over for liquidation by the Commissioner, by the Federal Deposit Insurance Corporation or by any other legally constituted authority, the powers and duties of the bank as trustee cease upon the entry of an order of the district court appointing a successor trustee pursuant to a petition as provided for in NRS 667.125 to 667.185, inclusive.
2. If an indenture, deed of trust or other instrument of like character that appoints a bank as trustee pursuant to subsection 1 includes a provision which provides for the appointment of a successor trustee if the bank is taken over for liquidation, the powers and duties of the bank as trustee cease upon being taken over by the Commissioner, the Federal Deposit Insurance Corporation or any other legally constituted authority and the successor trustee named, or whose selection is provided for, in the instrument immediately assumes the duties as trustee without appointment by the district court pursuant to NRS 667.125 to 667.185, inclusive.
Last modified: February 26, 2006