Arkansas Code
Chapter 36 - Industrial Loan Institutions
§ 23-36-116. Authority of Bank Commissioner to take charge

(a) The Bank Commissioner may forthwith take possession of the business and property of any industrial loan institution to which this chapter is applicable whenever it shall appear that the industrial loan institution:
(1) Has violated its charter or any laws applicable thereto;
(2) Is conducting its business in an unauthorized or unsafe manner;
(3) Is in an unsafe and unsound condition to transact its business;
(4) Has an impairment of its capital stock;
(5) Has refused to pay its certificates of indebtedness, investment contracts, or agreements to pay in accordance with the terms upon which the certificates of indebtedness, investment contracts, or agreements to pay were issued;
(6) Has become otherwise insolvent;
(7) Has neglected or refused to comply with the terms of a duly issued lawful order of the commissioner; or
(8) Has refused to submit its records, affairs, and concerns for inspection and examination to a duly appointed or authorized examiner of the commissioner, upon proper demand.

(b)
(1) On taking charge of the property and affairs of any industrial loan institution, the commissioner shall immediately give notice of that fact to all corporations, firms, individuals, and public or quasi-public bodies holding any of the industrial loan institution's assets.
(2) No corporation, firm, individual, or public or quasi-public body, whether within or without this state, shall have a lien or charge against any of the assets for any payment, advance, or clearance, or for any liability incurred after taking charge.
(3) The commissioner may permit the resumption of business by any industrial loan institution of which charge has previously been taken upon the conditions in each instance as may be approved by him or her. All laws setting forth the contingencies for the commissioner’s taking charge of industrial loan institutions are directory and discretionary, not mandatory. In the exercise in any instance of his or her discretion in respect thereof, the commissioner shall take into consideration and give weight according to his or her best judgment to the various factors involved or to be affected thereby, including:
(A) The interest of the present and prospective depositors of the respective industrial loan institution;
(B) The locality wherein it has its place of business;
(C) Other industrial loan institutions in the same or other localities of this state; and
(D) The local or general economic or financial conditions at the time being prevailing.

(4)
(A) Upon taking charge of any industrial loan institution, the commissioner shall immediately be vested at law and in equity with the sole, exclusive, and unconditional ownership and title in himself or herself, his or her successors in office, and assigns of all the property and assets of the industrial loan institution, whether the property and assets are situated within this state or elsewhere.
(B) The ownership and title in the commissioner is to be free from and unaffected by any levy, judgment, attachment, or other lien obtained thereafter as against the property of the industrial loan institution through legal proceedings and free from and unaffected by any equity arising in favor of or obtained by third persons after the commissioner has taken charge, but subject to any and all equities in favor of third persons that have arisen or been obtained as against any of the property or assets prior to the taking charge by the commissioner.

(5)
(A) All levies, judgments, attachments, or other liens obtained through legal or equitable proceedings in this state or elsewhere as against any industrial loan institution organized under the laws of this state, or any of its property, at any time within thirty (30) days prior to the taking charge by the commissioner, shall be null and void in case the commissioner takes charge of the property and affairs of the industrial loan institution.
(B) The property affected by such a levy, judgment, attachment, or other liens so obtained shall be immediately wholly discharged and released from the liens and shall pass to the commissioner as a part of the estate of the industrial loan institution.
(C) Nothing contained in this section shall have the effect to impair or destroy the title obtained by the levy, judgment, attachment, or other lien of a bona fide purchaser for value who shall have acquired the levy, judgment, attachment, or other lien without notice or reasonable cause for inquiry of the imminence of the taking charge by the commissioner.

(6)
(A) Upon the taking charge of any industrial loan institution, the commissioner shall proceed to:
(i) Liquidate its affairs;
(ii) Institute, maintain, and defend suit and other proceedings in the courts of this state or elsewhere;
(iii) Enforce in this state or elsewhere, if necessary, the liabilities of the stockholders; and
(iv) Upon the order empowered to be made by the circuit court of the county wherein the industrial loan institution had its place of business, sell, compound, or exchange any or all bad or doubtful debts of the estate and, on like order, sell or exchange any or all of the real, personal, or mixed property of the estate in such manner and upon such terms and considerations as to any sale, composition, or exchange as specified in the order.

(B) Any sale shall be public or private as specified in the order for the sale, and the sale or exchange of real property shall be subject to confirmation respectively by the court.

(7)
(A) The commissioner, under his or her hand and official seal, may appoint one (1) or more special deputy commissioners as agent or agents to assist him or her in the duty of liquidation and distribution of the assets of any insolvent industrial loan institution.
(B) The certificate of appointment shall be in duplicate, with one (1) copy to be filed in the office of the commissioner and the other copy in the office of the clerk of the circuit court of the county in which the industrial loan institution or trust company was located.
(C) The commissioner may from time to time authorize a special deputy to perform the duties connected with the liquidation and distribution as he or she may deem proper.

(8)
(A) The commissioner may employ such counsel and procure expert assistance and advice as may be necessary in the liquidation and distribution of the assets and may retain such of the officers or employees as he or she may deem necessary.
(B) The commissioner shall cause notice to be given by advertisement in such newspapers as he or she may direct, weekly for four (4) consecutive weeks, calling on all persons who may have claims against the estate to present the claim to him or her and make legal proof of the claim at a place and at a time to be fixed by the commissioner in the notice.
(C) If the commissioner doubts the justice or the validity of any claim, he or she may reflect the doubts and serve notice of the rejection upon the claimant either by depositing the notice in the mail or personally. An action upon a claim so reflected must be brought within six (6) months after service.
(D) The commissioner may apply for the declaration of a first dividend to creditors at any time after the expiration of the published notice and of the further ten (10) days' notice to creditors.