General Laws of Massachusetts - Chapter 167D Deposits and Accounts - Section 26 Reduction of deposit accounts where value of bank assets less than total deposits

Section 26. The supreme judicial court or any justice thereof sitting in equity may, on petition of a bank or the board of the bank, approved by the commissioner, approve or order a reduction of the deposit account of each depositor therein whenever the value of its assets is less than the total amount of its deposits so as to divide the loss equitably among said depositors. If thereafter the bank shall realize from said assets a greater sum than was fixed by said order of reduction, such excess shall be divided among the depositors whose accounts have been reduced but to the extent of such reduction only; provided, however, that at any time after the entry of a decree approving or ordering such a reduction of deposit accounts, said court or any justice thereof may, by order, finally determine the amount which said depositors are equitably entitled to receive in full settlement of their said deposit accounts and the manner of distribution of said amount.

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Last modified: September 11, 2015