(805 ILCS 35/28) (from Ch. 32, par. 1028)
Sec. 28. (1) The Director may forthwith direct the suspension of operation and take possession and control of any Development Credit Corporation whenever he or she finds that such Development Credit Corporation:
(a) is conducting its business contrary to any applicable law or its Article of Incorporation; or
(b) is conducting its business in an unsafe manner as a result of irregularities found or reported in its account; or
(c) has failed to give an adequate accounting or to take the necessary steps to render an accounting; or
(d) has failed or refused to furnish the Director with reports lawfully required to be furnished to the Director; or
(e) cannot with safety to its members and shareholders continue its business expediently; or
(f) is insolvent or in an unsafe condition to transact its business; or
(g) has suspended payment of its obligations; or
(h) has impaired its capital; or
(i) has through its officers refused to submit its books, papers or records of affairs for inspection by any examiner or has otherwise refused to be lawfully examined.
(2) Such suspension, possession and control by the Director shall continue until rescinded and terminated by the Director, however, such suspension, possession and control shall be rescinded and terminated once the cause for such suspension, possession and control has abated or has been corrected.
(3) Upon the suspension of operation of any Development Credit Corporation by the Director, the officers and directors shall, as soon thereafter as reasonably possible, deliver possession of all of the assets of such Development Credit Corporation to the Director or the Director's lawful representative. Thereafter the Director shall, upon examination, reasonably determine whether or not the cause for the suspension can be abated or corrected either by re-organization or otherwise without liquidating such Development Credit Corporation.
(4) If the Director reasonably determines that the cause for any such suspension cannot immediately be abated or corrected, he or she may permit the Development Credit Corporation so suspended to operate under his or her direction and control until such cause for such suspension is abated or corrected, or he or she may cause the Development Credit Corporation to be liquidated through a receivership. If the Director determines that the same shall be liquidated through receivership, he or she shall appoint a receiver and require of him such bond and security as he or she deems proper. Such receiver, under the direction of the Director, shall take possession of, and for the purpose of the receivership, title to the books, records and assets of every description of such Development Credit Corporation, and shall proceed to collect all debts, claims and obligations due or belonging to it and, upon the order of the circuit court of the county in which the Development Credit Corporation is located, may sell or compound all bad or doubtful debts and, on a like order, may sell the real and personal property of such Development Credit Corporation on such terms as the court shall direct.
(5) The receiver shall file with the Director a copy of each report which he or she makes to the court together with such other reports and records as the Director may require.
(6) The receiver shall have authority to sue and defend in his or her own name with respect to the affairs, assets, claims, debts, and choses in action of such Development Credit Corporation.
(7) The receiver may petition the Circuit Court of the County in which such Development Credit Corporation is located for authority to borrow money and to pledge the assets of such Development Credit Corporation as security therefor. Upon the filing of such petition, such Court shall set a date for the hearing of such petition and shall prescribe the form and manner of the notice to be given the officers, members, creditors or other persons interested in such Development Credit Corporation. Upon such hearing any officer, member, creditor or person interested shall have the right to be heard. If the court by order grants such authority then such receiver may borrow money and issue evidences of indebtedness therefor and may secure the payment of such loan by the mortgage, pledge, transfer in trust or hypothecation of any or all of the property and assets of such Development Credit Corporation whether real, personal or mixed, superior to any charge thereon for the expenses of liquidation. Such loan may be obtained in such amount upon such terms and conditions and with such provisions for repayment as may be deemed necessary and expedient and may be obtained for the purpose of facilitating liquidation, protecting or preserving the assets, expediting the making of distribution to members and other creditors, providing for the expense of administration and liquidation, aiding in the reopening or reorganization of such Development Credit Corporation or its merger or consolidation with another Development Credit Corporation, or in the sale of its assets. Such receiver shall be under no personal obligation to repay any such loan and shall have authority to take any and all action necessary or proper to consummate such loan and to provide for the repayment thereof, and may, when required, give bond for the faithful performance of all undertakings in connection therewith. Prior to petitioning the court for authority to make any such loan, such receiver may make application for or negotiate any such loan subject to obtaining an order of the court approving the same.
(8) The Director shall, upon appointing a receiver, cause notice to be given by advertisement in such newspaper as he or she may direct, once each week for 12 consecutive weeks, calling on all persons who may have claims against such Development Credit Corporation to present the same to such receiver and to make legal proof thereof.
(9) Such receiver shall deposit daily all moneys collected by him or her in any State or National bank selected by the Director who shall require of such depository satisfactory securities or satisfactory surety bond for the safekeeping and prompt payment of the money so deposited. No interest upon money so deposited shall be required of such depository.
(10) From time to time the Director shall make a ratable dividend of the moneys collected by such receiver on all such claims as may have been proved to his or her satisfaction or adjudicated in a court of competent jurisdiction, and, as the proceeds of the assets of such Development Credit Corporation are collected, shall make further dividends on all claims previously proven or adjudicated.
(11) The receiver of such Development Credit Corporation shall, after the expiration of the 12 weeks, file with the Director and with the clerk of such court as may have charge of the liquidation, a correct list of all creditors of the Development Credit Corporation, as shown by its books, who have not presented their claims and the amounts of their respective claims after allowing all just credits, deductions and set-offs as shown by the books of the Development Credit Corporation. Such claims so filed shall be deemed proven, unless objections are filed thereto by some party or parties interested therein within such times as shall be fixed by the Director or by such Court as may have charge of the liquidation.
(12) All unclaimed dividends shall be deposited with the Director to be paid out by him or her when proper claims therefor are presented to the Director and the Director shall pay the same out of such sum or funds so deposited with him or her. After one year from the final dissolution of the Development Credit Corporation, the Director shall make a pro rata distribution thereof to those claimants who have accepted dividends until such claim or claims are paid in full, and if any of the moneys shall then remain in his or her custody, the Director shall distribute the same pro rata to the shareholders. The Director shall deduct from the funds so deposited with him the expenses of distributing the same.
(13) At the close of the receivership, it shall be the duty of the receiver to turn over to the Director all books of account and ledgers of such Development Credit Corporation for preservation. All records of such receivership now and hereafter received by the Director shall be held by him for the period of 2 years after the close of the receivership and at the termination of the 2 years may then be destroyed.
(14) Whenever any such development Credit Corporation against which proceedings have been instituted, or for which a receiver has been appointed as hereinabove set out, on account of any or all the allegations heretofore specified, denies such grounds, it may at any time within 10 days, apply to the Circuit Court of Sangamon County, Illinois, to enjoin further proceedings in the premises; and such court after citing the Director to show cause why further proceedings should not be enjoined, and after the decision of the court or findings of a jury that such grounds do not exist, shall enter an order enjoining the Director and any receiver acting under his or her direction, from all further proceedings on account of such alleged grounds.
(15) All expenses of such receivership, including reasonable receiver's and attorney's fees, approved by the Director, shall be paid out of the assets of such Development Credit Corporation; and all expenses of any preliminary or other examinations into the condition of any such Development Credit Corporation or receivership, and all expenses incident and in connection with the possession and control of any Development Credit Corporation office, furniture and fixtures, books, records and assets of every description of such Development Credit Corporation by the Director for the purpose of reorganization or liquidation through receivership, shall be paid out of the assets of such Development Credit Corporation.
(Source: P.A. 83-345.)
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Last modified: February 18, 2015