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Texas Insurance Code - Not Codified - Section 21A.153. Sale Or Dissolution Of Insurer's Corporate Entity

Legal Research Home > Texas Lawyer > Insurance Code - Not Codified > Texas Insurance Code - Not Codified - Section 21A.153. Sale Or Dissolution Of Insurer's Corporate Entity

Sec. 21A.153. SALE OR DISSOLUTION OF INSURER'S CORPORATE
ENTITY.  (a)  Notwithstanding the entry of a liquidation order, the
liquidator may apply for an order to sell or dissolve the corporate
entity or charter of a domestic insurer or the United States branch
of an alien insurer domiciled in this state at any time after an
order of liquidation of the insurer has been granted, consistent
with the provisions of this section.
	(b)  Upon an application to sell the corporate entity or
charter, with notice as prescribed in this chapter, the
receivership court may enter an order:
	(1)  separating the corporate entity or charter, together
with any of its licenses to do business and the assets the
liquidator deems appropriate to the transaction, from the remaining
estate in liquidation and all of the remaining estate's assets and
the claims or interests of all claimants, creditors, policyholders,
and stockholders;
	(2)  canceling all outstanding stock and other securities of
and other equity interests in the corporate entity or charter,
provided that the cancellation may not affect any claim against the
estate by a holder of an equity interest;
	(3)  authorizing the issuance and sale of new stock or other
securities for the purpose of transferring to one or more buyers
control and ownership of the corporate entity or charter;  and
	(4)  authorizing the sale of the corporate entity or charter,
together with any of its authorizations or licenses to do business
and the general assets of the estate the liquidator deems to be
appropriate to the transaction, free and clear from the claims or
interest of all claimants, creditors, policyholders, and
stockholders.
	(c)  The sale of the corporate entity or charter may be made
in the manner and on the terms and conditions applied for by the
liquidator and ordered by the receivership court.  Any sale is
subject to the domiciliary state's laws regarding acquisition of an
insurer, Chapter 823, and any other law regarding the transfer of
control of insurers.  The proceeds from the sale of the corporate
entity or charter become a part of the property of the estate in
liquidation.  The separate corporate entity or charter, together
with any of its authorizations or licenses to do business and such
assets as the liquidator deems appropriate to the transaction, are,
following the sale of the corporate entity or charter, free and
clear from the claims or interest of all claimants, creditors,
policyholders, and stockholders of the corporation in liquidation.
	(d)  This section shall be liberally construed to accomplish
its purposes to:
	(1)  provide an expeditious and effective procedure to
realize the maximum proceeds possible from the sale of a corporate
entity or charter separated from an estate in liquidation;  and
	(2)  ensure that the purchasers receive clear and marketable
titles.
	(e)  If permission to sell the corporate entity or charter is
not granted prior to discharge of the liquidator, in accordance
with this section or otherwise with receivership court approval:
	(1)  the receivership court may order dissolution of the
corporate entity or charter;
	(2)  dissolution shall be deemed complete by operation of law
upon the discharge of the liquidator if the insurer is insolvent;
or
	(3)  dissolution may be ordered by the receivership court
upon the discharge of the liquidator if the insurer is under a
liquidation order for some other reason.

Added by Acts 2005, 79th Leg., ch. 995, Sec. 1, eff. Sept. 1, 2005.

Last modified: August 11, 2007