Texas Finance Code - Section 32.104. Capital Notes Or Debentures
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Texas Lawyer > Finance Code > Texas Finance Code - Section 32.104. Capital Notes Or Debentures
§ 32.104. CAPITAL NOTES OR DEBENTURES. (a) With the
prior written approval of the banking commissioner, a state bank
may at any time, through action of its board and without requiring
action of its shareholders or participants, issue and sell its
capital notes or debentures. The capital notes or debentures must
be subordinate to the claims of depositors and may be subordinate to
other claims, including the claims of other creditors or the
shareholders or participants.
(b) Capital notes or debentures may be convertible into
shares or participation shares of any class or series. The issuance
and sale of convertible capital notes or debentures are subject to
satisfaction of preemptive rights, if any, to the extent provided
by law.
(c) Without the prior written approval of the banking
commissioner, a state bank may not pay interest due or principal
repayable on outstanding capital notes or debentures when the bank
is in hazardous condition or is insolvent, or to the extent that
payment will cause the bank to be in hazardous condition or
insolvent, as determined by the banking commissioner.
(d) The amount of any outstanding capital notes or
debentures that meet the requirements of this section and that are
subordinated to unsecured creditors of the bank may be included in
equity capital of the bank for purposes of determining hazardous
condition or insolvency and for other purposes provided by rules
adopted under this subtitle.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
Section: 32.008 32.009 32.010 32.011 32.101 32.102 32.103 32.104 32.201 32.202 32.203 32.204 32.301 32.302 32.303
Last modified: August 10, 2007
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