32-1-506. Assessment on capital stock to make good impairment. (1) When the department determines that an impairment of capital exists in a bank, the department may notify the board of directors of the bank by written notice that the impairment exists, stating the amount of the impairment in dollars and percentage of the capital stock. The department may order the board to make good the impairment within 90 days from date of the notice.
(2) The board of directors shall, upon receipt of notice, convene and pass a resolution reciting the receipt of the notice of impairment and calling a special meeting of the stockholders of the bank in the manner provided in their bylaws.
(3) The stockholders at the meeting shall pass a resolution reciting the facts of receipt of notice from the department, notice of impairment, and notice of meeting and assessing themselves by assessing the stock of record. Payment of the assessment must be made within the time limit specified by the department in the notice of impairment.
(4) If there is any stock remaining on which the assessment is not paid as provided in this section, the stock or a part of the stock that is necessary to pay the assessment must be sold by the board of directors, acting through the cashier or secretary of the bank, at public or private sale, as appears best for all concerned, not less than 30 days after the day fixed for payment of assessment.
(5) Notice of the time and place of the sale must be given by common courier with tracking capability to the stockholders by the board through the bank's cashier or secretary at least 14 days prior to the sale.
(6) A sale of stock as provided in this section causes an absolute cancellation of the outstanding certificate or certificates evidencing the stock sold and makes them void in the hands of the stockholder or the stockholder's assigns or pledgees.
(7) The bank shall issue a new certificate:
(a) to the purchaser for the number of shares purchased; and
(b) to the stockholder of record. The new certificate must be delivered to the purchaser, stockholder, or any pledgee or assignee of the stock for the remaining shares, if any.
(8) The record of the original certificate sold must be marked canceled on the records of the bank, and that record is prima facie evidence of the regularity of the proceedings for the sale of the stock.
(9) If a bank fails to make good its capital impairment on demand of the department, as provided in this section, the department may immediately take charge of that bank and proceed to liquidate it as in the case of insolvency.
(10) If the stock does not sell for enough to pay the assessment that is owed, the board of directors may sue in the name of the corporation to collect the deficiency from the stockholder of record whose stock has been sold for the assessment.
History: En. Sec. 68, Ch. 89, L. 1927; re-en. Sec. 6014.72, R.C.M. 1935; amd. Sec. 29, Ch. 431, L. 1975; R.C.M. 1947, 5-801; amd. Sec. 4, Ch. 36, L. 1979; amd. Sec. 1016, Ch. 56, L. 2009; amd. Sec. 9, Ch. 49, L. 2013; amd. Sec. 25, Ch. 75, L. 2019.
Structure Montana Code Annotated
Title 32. Financial Institutions
Chapter 1. Banks and Trust Companies
Part 5. Dissolution, Closing, and Liquidation
32-1-501. Dissolution and disincorporation
32-1-502. Grounds for closing bank
32-1-504. Deposits in insolvent bank
32-1-505. Penalty for receiving deposits when insolvent or for making false statements
32-1-506. Assessment on capital stock to make good impairment
32-1-507. Power of closed banks to borrow money from governmental agencies
32-1-508. Corporate existence -- ceases when
32-1-509. Taxes on banks which have ceased to do business
32-1-510. Penalty for maliciously declaring bank insolvent
32-1-511. Bank may be placed in department's possession
32-1-512. Effect of posting notice
32-1-513. Taking possession of bank -- notice
32-1-514. Resumption after closing
32-1-515. Powers of department on closing bank -- court proceedings
32-1-516. Recourse of aggrieved bank -- injunction
32-1-517. Department may retain bank employees -- liquidating agent's salary and expenses
32-1-518. Compensation of agents and attorneys
32-1-519. through 32-1-530 reserved
32-1-531. Notice to creditors of insolvent bank
32-1-532. Claims -- allowance and rejection
32-1-534. Claims -- order of payment -- priorities
32-1-535. Claims -- partial payments -- assignments
32-1-536. Deposit of funds in department's hands
32-1-537. Disposition of unclaimed funds
32-1-538. Disposition of assets remaining after payment of claims
32-1-539. through 32-1-550 reserved
32-1-551. Liquidating officer's powers and duties
32-1-552. Further duties of liquidating officer
32-1-553. Department to file inventory -- report required -- exception
32-1-554. through 32-1-560 reserved