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  • PART I ADMINISTRATION OF THE GOVERNMENT
  • TITLE XXII CORPORATIONS
  • CHAPTER 176 FRATERNAL BENEFIT SOCIETIES
  • Section 33 Injunction against transaction of business; grounds; procedure

Section 33. When the commissioner upon investigation finds that a domestic society—

(a) Has exceeded its powers;

(b) Has failed to comply with any provision of this chapter;

(c) Is not fulfilling its contracts in good faith;

(d) Has a membership of less than four hundred after an existence of one year or more; or

(e) Is conducting business fraudulently or in a manner hazardous to its members, creditors, the public or the business, he shall notify the society of his findings, state in writing the reasons for his dissatisfaction, and require the society to show cause before him, at a time and place named, why he should not take action to have the society enjoined from carrying on any business until the violation complained of shall have been corrected, or to have any other appropriate action commenced in court, as provided in the next paragraph.

If on such date the society does not present good and sufficient reasons why he should not take such action, the commissioner may present the facts relating thereto to the attorney general, who shall, if he deems the circumstances warrant, commence an action to enjoin the society from transacting business or commence any other appropriate action in court.

The court shall thereupon notify the officers of the society of a hearing. If after a full hearing it appears that the society should be so enjoined or liquidated or a receiver appointed, or that other appropriate action be taken by the court, the court shall enter the necessary order.

No society so enjoined shall have authority to do business until—

(a) The commissioner finds that the violation complained of has been corrected;

(b) The cost of such action shall have been paid by the society if the court finds that the society was in default as charged;

(c) The court has dissolved its injunction; and

(d) The commissioner has reinstated the certificate of authority.

If the court orders the society liquidated, it shall be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed at once to take possession of the books, papers, money and other assets of the society, and, under the direction of the court, proceed forthwith to close the affairs of the society and to distribute its funds to those entitled thereto.

No action under this section shall be commenced in any court of the commonwealth unless brought by the attorney general upon request of the commissioner. Whenever a receiver is to be appointed for a domestic society, the court shall appoint the commissioner as such receiver.

The provisions of this section relating to hearing by the commissioner, action by the attorney general at the request of the commissioner, hearing by the court, injunction and receivership shall be applicable to a society which shall voluntarily determine to discontinue business.