Whenever the board of directors or a majority of the stockholders of any bank shall request the superintendent to cooperate in a reorganization of such bank, because of a substantial impairment of the capital of such bank, the superintendent is authorized to do the following:
(1) To make or have made a careful appraisement of the assets of the bank;
(2) If the appraisement shows the capital to be impaired, to charge the stock down to its actual value, if it has any, and if the appraisement shows the stock has no value, to charge off all capital, surplus and undivided profits and thereafter the rights and interests of such stockholders in any of the assets of the bank shall be subordinate to those of the creditors of the bank and the secured depositors to the extent of such security so held by such secured depositor;
(3) If the capital, surplus and undivided profits are not sufficient to take care of all losses, to prorate the remainder of the losses among the various depositors or common creditors;
(4) If found necessary, to set aside such portion of the assets of such bank to be either liquidated or delivered to creditors or depositors who may be disqualified under the law to participate in a reorganization, such portion to be the pro rata share of the assets which such disqualified creditors or depositors would be entitled to receive from the assets of the bank if the same were liquidated;
(5) To prepare a plan for the reorganization of such bank, including provisions for obtaining sufficient funds for capital purposes by the issuance of stock, such stock if necessary to be of different classes; and
(6) To submit such plan of reorganization, when prepared, to the board of directors of such bank which has made request for the cooperation of the superintendent for a reorganization.
Last modified: May 3, 2021