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  • PART I ADMINISTRATION OF THE GOVERNMENT
  • TITLE XXII CORPORATIONS
  • CHAPTER 172 TRUST COMPANIES
  • Section 30 Issue and sale of capital notes or debentures

Section 30. A. A trust company may, subject to the approval of the commissioner and upon vote of the holders of at least two-thirds of each class of its capital stock at an annual meeting or a special meeting duly called for the purpose, preceded in either case by a notice in writing sent to each stockholder of record by registered mail at least ten days before said meeting, issue and sell its capital notes or debentures of any maturity. The indebtedness evidenced by any such capital notes or debentures, including the principal thereof and premium, if any, and interest thereon, shall be subordinate to the claims of depositors and other creditors of such corporation, except claims in respect of other capital notes or debentures of such corporation at least equally subordinated, in accordance with such provisions for subordination as shall be approved by the commissioner, and such subordination shall be specifically enforceable by any interested person, including the commissioner or any conservator appointed by the commissioner whenever possession of the property and business of such corporation shall have been taken by the commissioner or such conservator. Any such issue of capital notes or debentures may contain such other provisions as the commissioner may approve, including provision for conversion rights. The commissioner in his discretion may by regulation provide that any such capital notes or debentures shall to the extent set forth in such regulation be treated as part of the capital funds of the issuing trust company for purposes of any of the provisions of this chapter.

B. Nothing in subsection A shall be construed as limiting the power of any such corporation to borrow money otherwise than through the issuance and sale of such capital notes or debentures, provided that no such corporation shall engage in the business of issuing and selling to depositors, customers or others its unsecured promissory notes except in accordance with such regulations as the commissioner in his discretion may adopt as to the conduct of such business or, in the absence of such regulations, with the prior approval of the commissioner. Any regulations adopted by the commissioner in accordance with the foregoing provisions of this subsection B may impose limitations on the aggregate amount of such promissory notes at any time outstanding, and the interest cost thereof, and may further require that reserves shall be maintained against the indebtedness evidenced thereby, all by classes of trust companies or otherwise.