Reorganization or Establishment of New Financial Institution

V.S.A. tit. 8, ch. 209, subch. 4

in effect

8 V.S.A. § 19401 Plan for reopening or establishment of new financial institution

19401. Plan for reopening or establishment of new financial institution If any Vermont financial institution has been closed by action of the Commissioner or its governing body and a receiver, either temporary or permanent, appointed or petitioned for, the depositors thereof, representing not less than 75 percent of the deposit liability, and with the approval and consent of the Commissioner, may join in a plan for the reopening or reorganization of the financial institution or the establishing of a new financial institution, and may select a committee of not more than 12 depositors to represent them for the purpose of carrying the plan into effect. However, a depositor who has been notified and does not refuse to give his or her consent within 15 days of that notification shall be included in reckoning that 75 percent. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 19402 Petitioning court for hearing; notice; hearing; approval of plan

19402. Petitioning court for hearing; notice; hearing; approval of plan (a) Upon receiving the approval of the plan by the Commissioner, the committee or the Commissioner may petition the Superior Court of Washington County, setting forth the details of the plan that has been agreed upon and requesting the court to set a day for hearing thereon. Thereupon the court shall make an order fixing a day for the hearing of the petition, notice of which shall be given to the depositors and the holders of equity interests in the financial institution by publication once in each week for not less than two successive weeks immediately preceding the date of hearing in some newspaper printed in the county where the financial institution’s principal place of business is located, or in such other newspaper, having a general circulation in the county, as the court may direct and by posting a copy of the notice upon the front door of the financial institution. (b) The court may adjourn the hearing from time to time and no further notice shall be required. At the date of hearing, or any adjournment thereof, the court shall take testimony, and if it appears that it is for the best interests of the depositors that the plan be approved, the court may make an order approving the same and fixing the terms and conditions upon which the receivership may be terminated. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 19403 Depositor’s objection to plan; receivership continued

19403. Depositor’s objection to plan; receivership continued If any of the depositors of the Vermont financial institution file written objections to the approval of the plan and refuse to consent to the plan, the court at the hearing may direct the receiver to set aside assets of each class of the receivership, in such amounts and character as the court finds to be just and equitable. Upon such terms as may be just and equitable, the court shall continue the receivership as to those assets and those depositors, and direct the receiver to turn over the remainder of the assets of the financial institution in his or her hands to the new or reorganized financial institution when directed so to do by the Commissioner, and discharge the receiver from further liability. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2021, No. 105 (Adj. Sess.), § 314, eff. July 1, 2022.

8 V.S.A. § 19404 Deposits of public money

19404. Deposits of public money If, in any financial institution referred to in section 19401 of this title, there are deposits of public money belonging to the State or any political subdivision of the State, the State Treasurer, if the deposit belongs to the State, and the Treasurer of any political subdivision, by and with the consent of the governing body of the political subdivision to which any such deposit may belong, may join with other depositors of the financial institution in a plan for the reopening or reorganizing of the institution or the establishment of a new financial institution, or the restricting of the withdrawal of deposits and for that purpose may bind the State or political subdivision, after being authorized, to limit withdrawals from that deposit over a period of time and in accordance with the plan as may have been agreed to by the other depositors of the financial institution joining in the plan. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2021, No. 105 (Adj. Sess.), § 315, eff. July 1, 2022.

8 V.S.A. § 19405 Deposits not paid or received; business continued

19405. Deposits not paid or received; business continued When a proceeding has been brought under section 19401 of this title, a deposit shall not be paid or received by that financial institution after the filing of the petition until the final decree of the Superior judge or, unless the Commissioner, in his or her discretion, and under such orders as the Commissioner may prescribe and from time to time alter and amend, permits the financial institution to continue in business pending final decree. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 19406 Orders under which financial institution may continue business

19406. Orders under which financial institution may continue business Those orders shall provide that deposits received after the petition is filed and before the final decree shall be kept in cash or invested in such liquid securities as the Commissioner shall approve and segregated from the prior assets of the financial institution and shall constitute a fund for the repayment in full of deposits made after the filing of the petition. Those orders shall further provide that no withdrawal of prior deposits may be permitted except on such notice and to such specified amounts and in such specified percentage as the Commissioner determines clearly will not result in a preference. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 19407 Expenses; deposits received after petition filed

19407. Expenses; deposits received after petition filed The expense of operation between filing of the petition and final decree shall be apportioned between the original assets and the new assets in such manner as the Superior judge may deem just. The deposits received between the filing of the petition and the final decree shall not be reduced by the decree except only to meet those expenses of operation, if any, or losses incurred with respect to those segregated assets. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.

8 V.S.A. § 19408 Petition denied; receiver to wind up affairs

19408. Petition denied; receiver to wind up affairs If the petition is denied, the Commissioner shall apply for a receiver to wind up the affairs of the financial institution, as provided in sections 19301 through 19315 of this title. In that case, the deposits, if any, received after petition filed and the resulting assets shall be administered separately from the other assets and liabilities, and those assets shall be distributed to the depositors by the receiver as soon as possible after his or her appointment and without deduction on account of the expense of the receivership except as provided in section 19407 of this title. Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2021, No. 105 (Adj. Sess.), § 316, eff. July 1, 2022.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/209Fetched: 10/21/2026