Title 9. Savings and Loan Associations — Subtitle 7. Involuntary Actions -- Conservator; Receivership

The savings and loan association or related entity fails to comply with a final order of the Division Director; or

The Division Director considers that the appointment of a conservator is in the public interest.

In an impaired or insolvent condition;

In substantial violation of any law or regulation;

Concealing any of its assets or records or refusing to submit its records or affairs for inspection to an examiner or lawful agent or the Division Director;

Conducting an unsafe or unsound operation;

In violation of any final order;

In need of the appointment of a conservator in order to preserve the assets of the savings and loan association for the benefit of the depositors and creditors; or

Eligible for conservatorship under the provisions of Title 10 of this article.

If authorized by the court, exercise the powers, rights, and privileges of the officers, directors, members, and stockholders of the savings and loan association;

Recommend for the court’s adoption a plan of reorganization, composition, or rearrangement of business, including its liabilities and capital structure;

Remove any director, officer, or employee of the savings and loan association;

Borrow from, pledge assets to, and repay a Federal Reserve Bank or other lenders;

Make wire transfers;

To the extent authorized by law or court order, pay withdrawals of deposits;

Pay negotiated order of withdrawal drafts and cashiers checks either directly or repay financial institutions on which the cashiers checks may be drawn;

Receive new deposits including direct deposit of United States Treasury, Social Security, and other payments;

Pay a Federal Reserve Bank or other bank cash to fund withdrawals;

Pay employees and necessary day-to-day operating expenses of the institution;

If authorized by the court, approve, in place of shareholders or members, a merger, conversion, transfer of assets, reorganization, or acquisition of the savings and loan association; and

If authorized by the court, request a stay of proceedings in other courts.

If a court appoints a conservator, each director, officer, and employee of a savings and loan association may remain in the respective office or position unless removed in accordance with this subtitle.

A member, director, officer, or controlling person may not have or exercise any power, right or privilege or act in connection with any of the association’s assets or property unless otherwise approved in writing by the conservator.

Shall continue to make payments in accordance with any contract with the association; and

May withdraw money from their savings accounts in accordance with the order of the court.

May be segregated; and

If provided by order of the court, may not be:

Retain special counsel;

Incur other than normal operating expenses; or

Liquidate any assets except in the normal course of operation.

The Division Director considers the appointment of a receiver to be in the public interest.

In an impaired or insolvent condition;

In substantial violation of any law or regulation;

Concealing any of its assets or records or refusing to submit its records or affairs for inspection to an examiner or lawful agent;

Conducting an unsafe and unsound operation;

In violation of any final order; or

Eligible for receivership under the provisions of Title 10 of this article.

All the powers and authority of the conservator;

The power to liquidate; and

Any other powers and authority as may be expressed in the order of any court of competent jurisdiction.

Except to the extent otherwise provided in this subsection, Title 13 of the Maryland Rules applies to the estate of a savings and loan association for which a receiver is appointed under this section.

On motion of the receiver any other interested party, or on the court’s own initiative, the court may, after notice and a hearing, waive compliance with or modify one or more of the requirements of Subtitle BP relating to the timing of, method of, or procedures for providing notices, providing claims, or administering distributions from the receivership estate, if the waiver or modification relates to the preservation of the confidentiality of savings account holders, or a reduction in the cost of administration of the receivership estate.

Any waiver or modification made under paragraph (2) of this subsection only shall apply prospectively to actions taken by the receiver or any other person after adoption by the court.

Notwithstanding any other provision of law and to the maximum extent permitted under the federal and State constitutions, the circuit court administering a conservatorship or receivership under this title shall have exclusive and plenary jurisdiction over all claims, actions, and proceedings that are brought by any person and that are related to the assets, property, powers, rights, privileges, duties, and liabilities of:

A court other than a court administering a conservatorship or receivership under this title may exercise jurisdiction over claims and actions if:

Any contingent, unliquidated, unmatured, or disputed claim, the fixing, liquidation, maturation, or settlement of the dispute of which would delay the administration of the receivership; or

Any right to payment arising from a right to an equitable remedy for breach of performance.

In a conservatorship or receivership, a court may reconsider for cause according to the equities of the case a claim that has been allowed or disallowed.

A reconsideration under this subsection:

This subsection does not alter or otherwise prejudice the right of the conservator or receiver to recover any excess payment or transfer made to a creditor.

Upon application of the conservator or receiver, if the court, after notice and a hearing, determines that the consideration to be received from a transaction is fair and reasonable, the circuit court administering a conservatorship or receivership under this title may approve any transfer, sale, or pledge of any or all of the assets of the savings and loan association or the conservatorship or receivership estate.

To the extent that a proposed transfer of any assets is accompanied by the assumption of certain liabilities of the savings and loan association without an assumption by a transferee of a like percentage or amount of other liabilities of the association that are in parity with those liabilities assumed, the court may approve the transaction if it determines that the assumption is consistent with the estimated distributions to claimants under a complete liquidation under § 9–711 of this subtitle or is otherwise fair and reasonable.

By order, the court may transfer any asset of the savings and loan association to a transferee under subsection (b) of this section free and clear of any liens, claims, pledges, security interests, charges, or other encumbrances.

The order shall state that any liens, claims, pledges, security interests, charges, or other encumbrances that attached to the asset before the transfer, after the transfer, either shall:

Unless the order of the court approving a transaction under subsection (b) or (c) of this section is appealed in the manner provided in this subsection within 30 days from the date of entry, the order shall become final and nonappealable.

Notwithstanding any other provision of law, the Court of Appeals shall have exclusive and plenary jurisdiction over an appeal of any order of a State court approving a transaction under subsection (b) or (c) of this section. To the extent possible, any appeal of an order of a State court approving a transaction under subsection (b) or (c) of this section shall be heard by the Court of Appeals on an expedited basis.

All unsecured claims of any class of priority shall be paid in full, or provision made for payment, before any claims of lesser priority are paid, and if there are insufficient funds to pay any class of claims of one priority in full, distribution to claimants in such class shall be made pro rata;

Notwithstanding the provisions of item (1) of this subsection, and subject to approval of the court administering the receivership of the savings and loan association, the receiver may at any time prior to the payment in full of all claims of a class with higher priority, make distributions to some or all claimants of a class with a lower priority, if a determination is made that at the time of the distribution, adequate funds exist or will be recovered during the receivership to pay in full all claims of any class with a higher priority; and

The court administering the receivership of the savings and loan association may, after notice and a hearing: