General Laws of Massachusetts - Chapter 171 Credit Unions - Section 81 Liquidation

Section 81. At any regular or special meeting, if proper notice of the purpose has been given, the members, upon recommendation of not less than two-thirds of the board of directors, may, by a majority vote of those present and entitled to vote, vote to liquidate the credit union. If a credit union is a member of the Massachusetts Credit Union Share Insurance Corporation, a committee of four shall be appointed in the following manner for the purpose of conserving and liquidating the assets, under the direction of said Massachusetts Credit Union Share Insurance Corporation and the commissioner: two members of the committee shall be appointed by the board of directors of the Massachusetts Credit Union Share Insurance Corporation, and two members shall be appointed by the liquidating credit union. If the credit union is not a member of the Massachusetts Credit Union Share Insurance Corporation, a committee of four members shall thereupon be elected by the members of the credit union for the purpose of conserving and liquidating the assets, under the direction of the commissioner. Any vacancy in the membership of the committee shall be filled by the remaining members thereof. The committee, in the name of the credit union, may prosecute and defend all suits and other legal proceedings and may execute all deeds and other instruments necessary to effectuate any sale of real or personal property or any compromise authorized by the committee; and any instrument so executed shall be valid and effectual to the same extent as though executed by the officers of the credit union by authority of its board of directors or of its members. After the credit union has voted to liquidate, no receipts shall be accepted for, or withdrawals be allowed from, its share or deposit accounts and no shares shall be transferred to deposits. No loans shall be offset against shares except as approved by the committee. After the payment of all debts and deposits, all holders of claims arising out of the ownership of shares, including persons who have not received payment for shares after requesting the withdrawal thereof, shall be entitled to the remaining assets in liquidation in proportion to their respective interests therein. The charter of a credit union in process of liquidation shall become void except for the purpose of discharging existing obligations and liabilities.

Funds representing unclaimed dividends in liquidation and remaining in the hands of the liquidating committee for six months after the date of the final dividend, shall be deposited by them together with all books and papers of the credit union, with the commissioner. Such funds shall be deposited in one or more trust companies, savings banks or national banks or on paid up shares and accounts of and in cooperative banks, or be used to purchase share accounts of a federal savings and loan association located in the commonwealth to the credit of the commissioner in his official capacity in trust for the members of the liquidating credit union entitled thereto, according to their several interests. Upon receipt of evidence satisfactory to him, the commissioner may pay over the money so held by him to the persons respectively entitled thereto.

In cases of doubt or of conflicting claims, he may require an order of the supreme judicial court authorizing and directing the payment thereof. He may apply the interest earned by the moneys so held toward defraying the expenses incurred in the payment of such unclaimed dividends. At the expiration of twelve months from the date of receipt thereof, such funds as still remain in the hands of the commissioner shall be disposed of as provided in section thirty-five of chapter one hundred and sixty-seven.

The provisions of this section providing for a preference in the payment of deposit liability shall not apply to credit unions which are insured in full.

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Last modified: September 11, 2015