Impairment of stock; levy of assessment to repair deficiency; reduction of stock.
1. If the Commissioner, as a result of any examination or from any report made to him, finds that the common or preferred stock of any association is impaired, he shall notify the association that the impairment exists and shall require the association to make good the impairment within 90 days after the date of the notice.
2. If the amount of the impairment as determined by the Commissioner is questioned by the association, then upon application filed within 10 days after the notice from the Commissioner that the impairment exists, the association may have the value of the assets in question be determined by appraisals made by independent appraisers acceptable to the Commissioner and the association.
3. The directors of the association upon which the notice has been served shall levy a pro rata assessment upon the common and any preferred stock to make good the impairment. They shall cause notice of the requirement of the Commissioner and of the levy to be given in writing to each stockholder of the association, and the amount of assessment which he must pay for the purpose of making good the impairment. In lieu of making the assessment, the impairment may be made good, without the consent of the Commissioner, by reduction of the common or preferred stock. Any stockholder who does not make payment under the assessment shall transfer sufficient stock to the association to pay his pro rata share of the assessment, and there is no further liability to the stockholder.
Last modified: February 26, 2006