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Form a Business

Dissolution and Liquidation

Ark. Code Ann. tit. 23, ch. 49
in effect

Ark. Code Ann. § 23-49-101 Definitions.

As used in this chapter: (1) “Circuit court” means the court with which the State Bank Department has filed the notice of possession under this chapter. The circuit court will make a determination for sale of assets only and not a determination of whether or not to take charge of an institution under the Bank Commissioner's supervision; (2) “Federal deposit insurance agency” means an agency or instrumentality of the United States that insures to any extent the deposits of a depository institution, including the Federal Deposit Insurance Corporation; (3) “Insolvent institution” means an institution that: (A) Is, in the opinion of the commissioner, incapable of or unlikely to meet the demands of creditors or depositors on a timely basis; (B) Has liabilities in excess of the total value of its assets as determined by the commissioner; or (C) Has been advised by the Federal Deposit Insurance Corporation of the Federal Deposit Insurance Corporation's intention to withdraw deposit insurance coverage; and (4) “Institution” means a state bank, state trust company, or subsidiary trust company.

Ark. Code Ann. § 23-49-102 Department taking possession — Procedure.

(a) In addition to the powers conferred upon the Bank Commissioner and the State Bank Department, the commissioner may take possession of the business and property of any institution which the commissioner supervises whenever it appears to the commissioner that the institution: (1) Is insolvent or in imminent danger of insolvency; (2) Is in an unsafe or unsound condition; (3) Has refused to pay its deposits or obligations in accordance with the terms under which those deposits or obligations were incurred; (4) Has concealed or refused to submit books, papers, records, or affairs of the institution for inspection to any examiner or to any lawful agent of the appropriate federal financial institution regulatory agency or of the department; (5) Has substantially dissipated assets or earnings due to: (A) Any violation of any law or rule; or (B) An unsafe or unsound practice; (6) Has requested through its board of directors that the department take possession for the benefit of depositors, other creditors, shareholders, or other persons; (7) Has an impairment of its capital as is currently required to be maintained by the department; (8) Has neglected or refused, for a period of at least thirty (30) days, to comply with the terms of a final order of the department or final order of a federal financial institution's regulatory agency essential to preserve the solvency of the institution; or (9) Has failed to pay the fees charged by the department under § 23-46-509 after due notice of the amount of the fee has been given. (b) Whenever it appears to the department that any one (1) or more of the conditions in subsection (a) of this section exists as to any institution, the department shall cause a certified notice to be served on the president or other executive officer actively in charge of the institution and demand possession of the business, property, and records of the institution from the officer citing the reasons for such a demand from subsection (a) of this section. The institution shall immediately surrender the possession to the commissioner.

Ark. Code Ann. § 23-49-103 Injunction against commissioner.

(a) Whenever any institution of whose business, property, and records the Bank Commissioner has taken possession deems itself aggrieved thereby, it may, at any time within ten (10) days after taking possession, apply to the circuit court to enjoin further proceedings. (b) After notifying the commissioner to show cause why further proceedings should not be enjoined and after hearing the allegations and proof of the parties and determining the facts, the court may, upon the merits, dismiss the application or enjoin the commissioner from further proceedings and direct him or her to surrender the business, property, and records to the institution.

Ark. Code Ann. § 23-49-104 When possession terminates.

When the Bank Commissioner has taken possession of the business and property of an institution under the provisions of § 23-49-102 , the commissioner shall hold possession of the business and property until the affairs of the institution have been finally liquidated as provided in this chapter, unless the institution has undertaken the voluntary liquidation of its affairs under this chapter or the Federal Deposit Insurance Corporation has been appointed receiver.

Ark. Code Ann. § 23-49-105 Notice of possession.

(a) Immediately upon taking possession of the business and property of any institution under § 23-49-102, the Bank Commissioner shall give notice by: (1) Causing the notice to be served upon the president or other executive officer actively in charge of the business of the institution; (2) Posting the notice at the main entrance at each office of the institution; (3) Filing the notice in the office of the circuit court in the county where the main office of the institution is located; (4) Causing the notice to be mailed to all correspondent banks of the institution. However, if the commissioner fails to provide the notice, the commissioner shall incur no liability thereon; and (5) Causing the notice to be published by one (1) insertion in a newspaper published in the City of Little Rock and having a general and substantially statewide circulation. (b) Upon the filing of the notice under subsection (a) of this section, the clerk shall: (1) Note the filing of the notice upon the records of the court; and (2) Enter the cause as an action upon the dockets of the court under the name and style of “In the matter of the liquidation of ” (inserting the name of the institution). (c) The court shall not have authority to review the action of the commissioner in taking possession of the institution's business, property, and records. However, the court may hear and determine all issues and matters pertaining to or connected with the liquidation of the institution, including: (1) The sale of assets or assumption of liabilities of the institution; and (2) The amount of the compensation and necessary expenses of any special representative, assistant, accountant, agent, or attorney employed by the commissioner, or the receiver appointed by the commissioner, as set forth in this chapter. (d) All entries, orders, judgments, and decrees of the court in connection with the liquidation proceedings shall be filed and entered of record in the cause of action. (e)(1) The rights and liabilities of an institution and of its creditors, depositors, shareholders, and all other persons interested in its estate shall, unless otherwise directed by the court, be fixed as of the date of the delivery of the notice of possession to the president or other executive officer actively in charge of the business of the institution. (2) In the case of mutual debts or mutual credits of equal priority between the institution and another person, the credits and debts shall be set off and the balance only shall be allowed or paid. (3) The right to setoff shall be determined as of the date of delivery of the notice of possession of the institution to the president or other executive officer actively in charge of the business of the institution.

Ark. Code Ann. § 23-49-106 Appointment of receiver — Restrictions on proceedings, liens, or credits.

(a)(1) The Bank Commissioner may appoint the appropriate federal deposit insurance agency as the receiver of the closed institution. If the federal deposit insurance agency accepts the appointment, the commissioner shall file notice with the court of the appointment. (2) If the Federal Deposit Insurance Corporation accepts appointment as receiver, it shall not be required to post any bond. (b)(1) Upon appointment as receiver, title to all assets of the institution vests in the receiver without the execution of any instruments of conveyance, assignment, transfer, or endorsement. (2) If no other receiver is appointed as provided in this chapter, the commissioner shall act as receiver and have all of the powers and duties of a receiver as provided in this chapter. (c) Except as otherwise provided, the sole and exclusive right to liquidate and terminate the affairs of any institution is vested in the receiver appointed under this section, and no other receiver, assignee, trustee, or liquidating agent shall be appointed by any court or any other person. (d) After the commissioner has taken possession of the business and property of any institution, no suit, action, or other proceeding at law or in equity shall be commenced or prosecuted against the institution upon any debt, obligation, claim, or demand. All such claims may be brought against the receiver. (e)(1) No person holding any of the property or credits of the institution shall have any lien or charge against the property or credits for any payment, advance, or clearance made after the commissioner has taken possession. (2) A lien shall not attach to any of the assets or property of the institution by reason of the entry of any judgment recovered against the institution after the commissioner has taken possession of its business and property.

Ark. Code Ann. § 23-49-107 Powers of receiver.

The receiver of a closed institution may do the following: (1) Take possession of all books, records, and assets of the institution; (2) Collect all debts, claims, and judgments belonging to the institution and do such other acts as are necessary to preserve and liquidate its assets; (3) Execute in the name of the institution any instrument necessary or proper to effectuate its powers or perform its duties as receiver; (4) Initiate, pursue, and defend litigation involving any right, claim, interest, or liability of the institution; (5) Exercise any and all existing fiduciary functions of the institution as of the date of appointment as receiver; (6) Borrow money as necessary in the liquidation of the institution and secure the borrowings by the pledge or mortgage of assets. The repayment of money borrowed under this subsection and interest thereon shall be considered an expense of administration under § 23-49-111; (7) Abandon or convey title to any holder of a mortgage, deed of trust, security interest, or lien against property in which the institution has an interest whenever the receiver determines that to continue to claim the interest is burdensome and of no advantage to the institution, its depositors, creditors, or shareholders; (8) Repudiate any leases or executory contracts to which the institution is a party in accordance with § 23-49-112; and (9) Subject to the approval of the court: (A) Sell any and all real and personal property to compromise any debt, claim, or judgment due from the institution and discontinue any action or other proceedings pending; (B) Pay off all mortgages, deeds of trust, security agreements, and liens upon any real or personal property belonging to the institution and purchase at judicial sale or at sale authorized by court order, any real or personal property in order to protect the institution's equity in that property; and (C) Sell in bulk the assets and liabilities of the institution.

Ark. Code Ann. § 23-49-108 Sale of assets — Assumption of deposit liabilities by new institution.

(a) The receiver may, with ex parte approval of the circuit court, sell all or any part of the institution's assets to one (1) or more other state or federally chartered depository institution or to a federal deposit insurance agency in its corporate capacity. (b) The receiver may also borrow from a federal deposit insurance agency any amount necessary to facilitate the assumption of deposit liabilities by a newly chartered or existing state or federally chartered depository institution, assigning any part or all of the assets of the institution as security for the loan.

Ark. Code Ann. § 23-49-109 Presentation of claims — Notice of claims procedure — Rejection of claims — Statute of limitations.

(a) All parties having claims against the closed institution shall present their claims supported by proof to the receiver within one hundred eighty (180) days after the Bank Commissioner has taken possession. (b) The receiver shall cause notice of the claims procedures prescribed by this section to be: (1) Published once a month for three (3) consecutive months in a newspaper published in the City of Little Rock and having a general and substantially statewide circulation; and (2) Mailed to each person whose name appears as a creditor upon books of the institution at the person's last address of record. (c)(1) Within one hundred eighty (180) days following receipt of the claim, the receiver shall notify in writing any claimant whose claim has been rejected. Notice is effective when mailed. (2) Any claimant whose claim has been rejected by the receiver may petition the circuit court for a hearing on the claim within sixty (60) days from the date the claim was rejected. (d) The period described in subsection (a) of this section may be extended by written agreement between the claimant and the receiver. (e)(1) The claim of any party against the closed institution shall be disallowed, other than any portion of the claim which was allowed by the receiver, as of the end of the sixty-day period described in subsection (c) of this section, if the party having the claim fails to: (A) Request an administrative review of any claim by the receiver in accordance with proper procedure; or (B) File suit on the claim, or continue an action commenced before the appointment of the receiver, before the end of the sixty-day period. (2) The disallowance shall be final, and the claimant shall have no further rights or remedies with respect to the claim.

Ark. Code Ann. § 23-49-110 Claims filed after 180-day claim period.

Any claims filed after the one-hundred-eighty-day claim period prescribed by § 23-49-109 and subsequently accepted by the receiver or allowed by the circuit court shall be entitled to share in the distribution of assets only to the extent of the undistributed assets in the hands of the receiver on the date the claims are accepted or allowed.

Ark. Code Ann. § 23-49-111 Payment of claims.

(a) All claims against the institution's estate, proved to the receiver's satisfaction or approved by the circuit court, shall be paid in the following order: (1) Administration expenses; (2) Claims given priority under other provisions of state or federal law; (3) Deposit obligations; (4) Other general liabilities; (5) Debt subordinated to the claims of depositors and general creditors; and (6) Equity capital securities. (b) Administrative expenses shall include: (1) Court costs; (2) Compensation of each regular officer or employee of the receiver for the time actually devoted by the officer or employee to the liquidation of the institution at an amount not to exceed the compensation paid to the officer or employee for the performance of his or her regular duties; (3) Actual expenses of each regular officer and employee necessarily incurred in the performance of his or her duties; (4) Compensation and expenses of any special representative, assistant, accountant, agent, or attorney employed by the receiver; and (5) If the Bank Commissioner is acting as receiver, such reasonable general overhead expenses as may be incurred by the commissioner in the liquidation of the affairs of the institution, which shall be ascertained, determined, and fixed by the commissioner. (c) Interest on any claims shall not be paid until all claims within the same class have received the full principal amount of claim.

Ark. Code Ann. § 23-49-112 Rejection of contracts and leases.

(a) Within one hundred eighty (180) days after the date that the Bank Commissioner has taken possession, the receiver may, at his or her election, reject: (1) Any executory contracts to which the closed institution is a party without any further liability to the closed institution or the receiver; and (2) Any obligation of the institution as a lessee of real or personal property. (b) The receiver's election to reject a lease shall create no claim for rent other than rent accrued to the date of termination.

Ark. Code Ann. § 23-49-113 Subrogation of federal deposit insurance agency to rights of depositors.

Whenever a federal deposit insurance agency pays or makes available for payment the insured deposit liabilities of a closed institution, the federal deposit insurance agency, whether or not it acts as receiver, shall be subrogated by operation of law to all rights of depositors against the closed institution relating to claims for deposits so paid by the federal deposit insurance agency to the extent necessary to enable the federal deposit insurance agency, under federal law, to make insurance payments available to depositors of closed institutions.

Ark. Code Ann. § 23-49-114 Appointment of successor to fiduciary and representative proceedings.

(a)(1) The receiver, with the approval of the circuit court, may appoint one (1) or more successors to any or all of the rights, obligations, assets, deposits, agreements, and trusts held by the closed institution as trustee, administrator, executor, guardian, agent, and all other fiduciary or representative capacities. (2) The approval may be obtained in connection with the proceedings authorized under § 23-49-108. (3)(A) A successor's duties and obligations begin upon appointment to the same extent binding upon the closed institution and as though the successor had originally assumed the duties and obligations. (B) Specifically, a successor shall be appointed to administer trusteeships, administrations, executorships, guardianships, agencies, and other fiduciary or representative proceedings to which the closed institution is named or appointed in wills, whenever probated, or to which it is appointed by any other instrument, court order, or by operation of law. (b) This section shall not impair any right of the grantor or beneficiaries of trust assets to secure the appointment of a substituted trustee or manager. (c) Within thirty (30) days after appointment, a successor shall give written notice, insofar as practical, that the successor has been appointed in accordance with applicable law to all interested parties named in: (1) The books and records of the closed institution; and (2) Trust documents held by it.

Ark. Code Ann. § 23-49-115 Notice concerning safekeeping and safe-deposit boxes.

(a)(1) The receiver shall cause notice to be mailed to the last address of record to the owners of any personal property in the possession of or held by a closed institution for safekeeping, and to all lessees of safe-deposit boxes. (2) The notice shall require the intended recipients to appear and assert their claims to the property within sixty (60) days from the date of the notice. (b) Subject to approval of the circuit court, the receiver shall make such agreements or arrangements as may be necessary for the disposition of property held by the closed institution for safekeeping and the contents of safe-deposit boxes, and for the termination of any leases or other contracts relating to the property or contents.

Ark. Code Ann. § 23-49-116 Actions for enforcement of rights, demands, or claims vested in an institution or its shareholders or creditors.

Notwithstanding any other provision of state law, the receiver may, within five (5) years from the date of closing of the institution, institute and maintain, in the name of the receiver, any action or proceeding for the enforcement of any right, demand, or claim that is vested in the institution.

Ark. Code Ann. § 23-49-117 Contents of articles of dissolution.

When the proceedings described in this chapter have been completed, the receiver shall execute and file, in the manner provided in this section, articles of dissolution, setting forth the following information: (1) The name of the institution; (2) The place where its main office was located; (3) The names and addresses of the directors and officers of the institution at the time the liquidation proceedings were begun; (4) A brief summary of the aggregate amount of general claims finally allowed against the institution, the order in which the claims were paid, and the aggregate amount of all other claims against the institution. A statement of the aggregate payments made on each of the groups of claims must be provided, referencing the orders of the receiver or the circuit court authorizing those payments and the current reports documenting such payments; and (5) A brief summary of the aggregate amount of payments made to the shareholders of the institution, whether of money or other property, and a reference to the orders of the receiver or the circuit court authorizing the payments and to the current reports wherein documentation of the payments is made.

Ark. Code Ann. § 23-49-118 Execution and filing of articles with department — Certificate of dissolution.

(a) The articles of dissolution shall be executed in duplicate and presented in duplicate to the State Bank Department accompanied by fees prescribed by department rules. (b)(1) Upon presentation of the articles of dissolution, the Bank Commissioner shall endorse his or her approval upon each of the duplicate copies of the articles if he or she finds that they conform to law. (2) When all fees have been paid as required by law, the commissioner shall file one (1) copy of the articles in the department and issue two (2) certificates of dissolution. One (1) certificate of dissolution shall be filed with the department and the second shall be delivered to the receiver. (c) Upon the issuance of the certificate of dissolution, the institution shall be dissolved and its existence shall cease. (d) Upon the issuance of the certificate of dissolution, the receiver shall be authorized, as agent for the directors and shareholders of any subsidiary trust company, to file any and all documents with the Secretary of State necessary to terminate its corporate existence under applicable corporate law.

Ark. Code Ann. § 23-49-119 Voluntary liquidation.

(a)(1) An application for approval to voluntarily liquidate the affairs of an institution shall be submitted to the Bank Commissioner in the manner and form that the commissioner may prescribe, shall include the information set forth in subsection (b) of this section, and shall contain such additional information which the commissioner may require. (2) The application shall include duplicate copies of a resolution authorizing the dissolution and duplicate copies of a certificate, verified by the applicant's president or chief executive officer or a vice president, stating the facts pertaining to the resolution and that the applicant's liabilities have been paid in full. (b) Each duplicate certificate shall have annexed thereto, over the official signatures, evidence showing: (1) The date on which the resolution was authorized by the affirmative vote of the holders of at least a simple majority of the outstanding shares entitled to vote thereon; (2) The number of shares of each class entitled to vote on the resolution which were outstanding on the date of the stockholders' meeting; (3) The number of shares of each class entitled to vote on the resolution whose owners were present in person or by proxy; (4) The number of shares of each class voted for and against the resolution; and (5) The manner in which the meeting was called and the time and manner of giving notice, with a certification that the meeting was lawfully called and held. (c)(1) Upon receipt of the application, the commissioner shall investigate its merits. (2) If the commissioner is satisfied that the application is complete and that all applicable provisions of law have been complied with, he or she shall cause an examination to be made of the applicant institution for the purpose of verifying the payment of all of its liabilities. (3) If the examination satisfies the commissioner that all of the applicant's liabilities have been paid, he or she shall endorse one (1) copy of the certificate with his or her statement that the institution is voluntarily liquidating. (d) The return of the endorsed copy of the certificate shall operate to free the institution from further examination and to authorize it, under its original corporate name, to sue and be sued, to execute conveyances and other instruments, to take, hold, and own property, and to do all such other things as may be necessary to realize upon its remaining assets for the pro rata benefit of its stockholders, but not to engage or continue in any new or other business under its charter or otherwise. (e) The liquidation shall proceed as expeditiously as possible, and at the conclusion thereof, the institution shall surrender its charter. (f) In lieu of continuing the liquidation under the original corporate name, the institution may transfer the remaining assets to a trustee agreed upon by the stockholders by a majority vote and shall thereupon surrender its charter. (g) Each application for approval of a voluntary dissolution shall be accompanied by a fee as shall be set by State Bank Department rules and shall be paid to the department.

Ark. Code Ann. § 23-49-120 Voluntarily placing an institution in possession of commissioner.

(a) Any institution may place its affairs and assets under the control of the Bank Commissioner by posting a notice on its front door as follows: “This financial institution is in the possession of the Arkansas State Bank Commissioner”. (b) The posting of the notice or the taking possession of any institution by the commissioner shall be sufficient to place all of the assets and property of whatever nature in the possession of the commissioner and shall operate as a bar to and dissolution of any attachment proceedings.
Source: Public.Resource.Org / UniCourt, Official Code of Arkansas Annotated, Release 78 (2020) (unicourt.github.io/cic-code-ar)URL: https://unicourt.github.io/cic-code-ar/transforms/ar/ocar/r78/gov.ar.code.title.23.htmlFetched: 11/8/2026

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