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General Laws

Section 26A. No person, acting directly or indirectly or through or in concert with one or more other persons, shall acquire control of any such corporation, through a purchase, assignment, transfer, pledge or other disposition of voting stock of such bank unless the commissioner has been given sixty days prior written notice of such proposed acquisition and within said sixty days the commissioner has not issued a notice disapproving the proposed acquisition or extending for up to another thirty days the period during which such a disapproval may issue. The period for disapproval may be further extended only if the commissioner determines that the acquiring party has not furnished all the material required hereinafter for a notice of proposed acquisition or that in the commissioner’s judgment any material information submitted is substantially inaccurate. An acquisition may be made prior to expiration of the disapproval period if the commissioner issues written notice of his intent not to disapprove the action. A notice of proposed acquisition filed pursuant to this section shall contain the following information:

(1) The identity, personal history, business background and experience of each person by whom or on whose behalf the acquisition is to be made, including his material business activities and affiliations during the past five years, and a description of any material pending legal or administrative proceedings in which he is a party and any criminal indictment or conviction of such person by a state or federal court.

(2) A statement of the assets and liabilities of each person by whom or on whose behalf the acquisition is to be made, as of the end of the fiscal year for each of the five fiscal years immediately preceding the date of the notice, together with related statements of income and source and application of funds for each of the fiscal years then concluded, all prepared in accordance with generally accepted accounting principles consistently applied, and an interim statement of the assets and liabilities for each such person, together with related statements of income and source and application of funds, as of a date not more than ninety days prior to the date of the filing of the notice.

(3) The terms and conditions of the proposed acquisition and the manner in which the acquisition is to be made.

(4) The identity, source and amount of the funds or other consideration used or to be used in making the acquisition, and if any part of these funds or other consideration has been or is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction, the names of the parties, and any arrangements, agreements, or understandings with such persons.

(5) Any plans or proposals which any acquiring party making the acquisition may have to liquidate the bank, to sell its assets or merge it with any company or to make any other major change in its business or corporate structure or management.

(6) The identification of any person employed, retained, or to be compensated by the acquiring party, or by any person on his behalf, to make solicitations or recommendations to stockholders for the purpose of assisting in the acquisition, and a brief description of the terms of such employment, retainer or arrangement for compensation.

(7) Copies of all invitations or tenders or advertisements making a tender offer to stockholders for purchase of their stock to be used in connection with the proposed acquisition.

(8) Any additional relevant information and in such form as the commissioner may require by specific request in connection with any particular notice.

The commissioner may disapprove any proposed acquisition if: (1) the proposed acquisition of control would result in a monopoly; (2) the effect of the proposed acquisition of control may be substantially to lessen competition or to tend to create a monopoly or the proposed acquisition of control would in any other manner be in restraint of trade and the anti-competitive effects of the proposed acquisition of control are not clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served; (3) the financial condition of any acquiring person is such as might jeopardize the financial stability of the bank or prejudice the interests of the depositors of the bank; (4) the competence, experience, or integrity of any acquiring person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors of the bank, or in the interest of the public to permit such person to control the bank; or (5) any acquiring person neglects, fails or refuses to furnish all the information required by the commissioner. Any disapproval shall be in writing to the acquiring party and shall include a statement of the basis for such disapproval. Within ten days of the receipt of a notice of disapproval the acquiring party may request a hearing to be held by the commissioner or his designee. Such hearing shall be held under the provisions of chapter thirty A and regulations issued thereunder.

For the purposes of this section, the term “person” shall mean an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, or any other form of entity not specifically listed herein; and the term “control” shall mean the power, directly or indirectly, to direct the management or policies of any such corporation or to vote twenty-five per centum or more of any class of voting securities of any such corporation.

The provisions of this section do not alter or amend the authorities of the commissioner or the Board of Bank Incorporation set out in any other sections of law.

Whoever violates the provisions of this section shall be punished by a fine of not more than five hundred dollars or by imprisonment for not more than six months, or both such fine and imprisonment.

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