(a) A trust company may, with the written consent of the department, and if authorized by its articles of incorporation or approved by persons owning two-thirds of the stock of the trust company entitled to vote, issue convertible or nonconvertible capital notes or debentures. The principal amount of notes and debentures outstanding at any time may not exceed 33 1/3 percent of the capital stock and surplus fund of the trust company on the date of issuance. The rate and term are subject to the approval of the department, but the term may not exceed 20 years.
(b) A trust company may not retire capital notes or debentures if the retirement creates an impairment of its capital. Capital notes and debentures are subordinated in right of payment in the event of insolvency or liquidation of the trust company to the prior payment of all deposits and all claims of other creditors except the holders of securities on a parity with the capital notes and debentures and the holders of securities expressly subordinated to the capital notes and debentures.
Section: Previous 06.26.040 06.26.050 06.26.060 06.26.070 06.26.080 06.26.085 06.26.090 06.26.100 06.26.110 06.26.120 06.26.130 06.26.140 NextLast modified: November 15, 2016