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  • Acts
  • 2006
  • Chapter 277 AN ACT RELATIVE TO A CERTAIN CORPORATE CREDIT UNION.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same as follows:

SECTION 1. Section 4 of chapter 216 of the acts of 1932, as amended by section 2 of chapter 157 of the acts of 1992, is hereby amended by striking out the first sentence and adding in place thereof the following 3 sentences:— The corporation may invest its funds in loans to members in such manner as its bylaws may prescribe, may borrow money for such purpose and may secure such borrowing by pledging or granting a security interest in any of its assets. It may invest in or loan to a credit union service organization established by the corporation solely for the purpose of performing the functions of item processing, securities brokerage services, financial and investment advisory services, investment services, or loan support services subject to any limitations and restrictions for a federal corporate credit union service organization. The establishment of investment in loans to such service organization shall be subject to the approval of the commissioner under such terms and conditions as he may impose.

SECTION 2. Said chapter 216 of the acts of 1932, as amended by chapter 157 of the acts of 1992, is hereby further amended by adding the following section:—

Section 8. (A)(1) The corporation may consolidate or merge with any corporate credit union into a single state or federally-chartered corporate credit union on such terms as shall have been agreed upon by a vote of two-thirds of the board of directors of the corporation and approved at the annual or special meeting of the members of the corporation called for that purpose, by a vote of at least two-thirds of those members present, qualified to vote, and voting. A plan of consolidation or merger, approved by a two-thirds vote of the board of directors shall be submitted to the members at the meeting. The plan of consolidation or merger shall include the elements of a notice of a merger required by regulations of the National Credit Union Administration, and such additional information as may be required by the commissioner. The meeting shall be held in accordance with the by-laws. At such meeting, each member shall have 1 vote. Upon receipt of the required approval of the members, articles of consolidation or merger shall be filed with the commissioner, which shall state: (i) the names of the corporations and the name of the resulting or surviving corporation; (ii) the effective date of the consolidation or merger determined pursuant to the agreement of consolidation or merger; and, (iii) any amendment to the charter or articles of organization of the surviving corporation to be effected pursuant to the consolidation or merger. Such articles of consolidation or merger shall be signed by the president or a vice president and the clerk or an assistant clerk of each corporation, who shall state under the penalties of perjury that the agreement of consolidation or merger has been duly executed on behalf of such corporation and has been approved by the members as required.

(2) No such consolidation or merger shall occur until approved in writing by the commissioner under such terms and conditions as he may impose. Upon his approval of the consolidation or merger, the commissioner shall endorse his approval upon said articles of consolidation or merger. Upon the endorsement of the commissioner, such articles of consolidation or merger shall be filed with the secretary of state, together with the following information which shall not for any purpose be treated as a permanent part of the charter or articles of organization of the resulting or surviving corporation: (a) the post office address of the initial principal office of the resulting or surviving corporation in the commonwealth; (b) the name, residence and post office address of each of the initial trustees or directors and the president, treasurer and clerk of the resulting or surviving corporation; (c) the fiscal year of the resulting or surviving corporation initially adopted; (d) the date initially fixed in the by-laws for the annual meeting of the members of the resulting or surviving corporation. The consolidation or merger shall become effective when the articles of consolidation or merger are filed with the secretary of state, unless said articles specify a later effective date, in which event the consolidation or merger shall become effective on such later date.

(3) Upon the consolidation or merger of the corporation under the provisions of this section, the corporate existence of all but 1 of the consolidating or merging corporations shall be discontinued and consolidated or merged into that of the remaining corporation, which shall continue; and the charter of each other corporation shall terminate. All of the rights and privileges of each consolidating corporation and its right, title and interest to all property of whatever kind and thing in action, and every right, privilege, interest or asset of conceivable value or benefit then existing which would inure to it except for such consolidation or merger, shall fully, and without any right of reversion, be transferred to or vested in the continuing corporation, without further act or deed and the continuing corporation shall have and hold the same in its own right to every extent that the same was owned and held by the consolidating or merging corporation from which it was transferred.

(4) A consolidating or merging corporation's rights, obligations and relations to any person, member, creditor, trustee or beneficiary of any trust, as of the effective date of the consolidation or merger, shall remain unimpaired and the continuing corporation shall, by the consolidation or merger, succeed to all such relations, obligations and liabilities, as though it had itself assumed the relation or incurred the obligation or liability; and its liabilities and obligations to creditors, existing for any cause whatsoever, shall not be impaired by the consolidation or merger; nor shall any obligation or liability of any member in any such corporation, continuing or consolidating or merging, which is party to the consolidation or merger, be affected by any such consolidation or merger, but such obligations and liabilities shall continue as fully and to the same extent as the same existed before the consolidation or merger.

(5) A pending action or other judicial proceeding to which any of the consolidating or merging corporations is a party shall not be considered to have abated or to have discontinued by reason of the consolidation or merger, but may be prosecuted to final judgment, order or decree in the same manner as if the consolidation or merger had not been made; or the continuing or merging corporation may be substituted as a party to any such action or proceeding to which the consolidating or merging corporation was a party, and any judgment, order or decree may be rendered for or against the continuing corporation that might have been rendered for or against such consolidating or merging corporation if the consolidation or merger had not occurred. For the purposes of this section, a corporate credit union shall mean a corporate credit union insured by the National Credit Union Share Insurance Fund with its main office in any state in the United States.

(B)(1) At any regular or special meeting, if proper notice of the purpose has been given, the members, upon recommendation of not less than two-thirds of the board of directors, may, by a two-thirds vote of those present and entitled to vote, vote to liquidate the corporation. A committee of 4 members shall thereupon be elected by the members of the corporation for the purpose of conserving and liquidating the assets under the direction of the commissioner. Any vacancy in the membership of the committee shall be filled by the remaining members thereof. The committee, in the name of the corporation, may prosecute and defend all suits and other legal proceedings and may execute all deeds and other instruments necessary to effectuate any sale of real or personal property or any compromise authorized by the committee; and any instrument so executed shall be valid and effective to the same extent as though executed by the officers of the corporation by authority of its board of directors or of its members. After the corporation has voted to liquidate, no receipts shall be accepted for, or withdrawals be allowed from, its share or deposit accounts and no shares shall be transferred to deposits. No loans shall be offset against shares except as approved by the committee. After the payment of all debts and deposits, all holders of claims arising out of the ownership of shares, including persons who have not received payment for shares after requesting the withdrawal thereof, shall be entitled to the remaining assets in liquidation in proportion to their respective interests therein. The power and authority of the corporation to transact business, of any kind whatsoever, when it is in the process of liquidation shall terminate except for such business as may be necessary for the purpose of discharging existing obligations and liabilities.

(2) Funds representing unclaimed dividends in liquidation and remaining in the hands of the liquidating committee for 6 months after the date of the final dividend shall be deposited by them, together with all books and papers of the corporation, with the commissioner. Such funds shall be deposited in 1 or more trust companies, savings banks or national banks or on paid-up shares and accounts of, and in, cooperative banks, or be used to purchase share accounts of a federal savings and loan association located in the commonwealth to the credit of the commissioner in his official capacity in trust for the members of the corporation entitled thereto, according to their several interests. Upon receipt of evidence satisfactory to him, the commissioner may pay over the money so held by him to the persons respectively entitled thereto.

(3) In cases of doubt or of conflicting claims regarding the funds described in paragraph (2), the commissioner may require an order of the supreme judicial court authorizing and directing the payment thereof. He may apply the interest earned by these funds toward defraying the expenses incurred in the payment of the unclaimed dividends. At the expiration of 12 months from the date of their receipt, the funds still remaining in the hands of the commissioner shall be disposed of as provided in section 35 of chapter 167.

Approved August 30, 2006.