Guam § 106402 - Commissioner in Possession.

§ 106402. Commissioner in Possession.

(a) The Commissioner may take possession of a territorial bank if, after a hearing, he shall find:

(1) Its capital is impaired or it is otherwise in an unsound condition.

(2) Its business is being conducted in an unlawful or unsound manner.

(3) It is unable to continue normal operations.

(4) Its examination has been obstructed or impeded.

(b) The Commissioner shall take possession by posting upon the premises a notice reciting that he is

assuming possession pursuant to this Title and the time, not earlier than the posting of the notice, when his

possession shall be deemed to commence. A copy of the notice shall be filed in the District Court of Guam.

The Commissioner shall notify the Federal Reserve Bank of the district of taking possession of any

territorial bank which is a member of the Federal Reserve System.

(c) When the Commissioner has taken possession of a territorial bank he shall be vested with the full

and exclusive power of management and control, including the power to continue or to discontinue the

business, to stop or to limit the payment of its obligations, to employ any necessary assistants, to execute

any instrument in the name of the bank, to commence, defend and conduct in its name any action or

proceeding in which it may be a party, to terminate his possession by restoring the bank to its board of

directors and to reorganize or liquidate the bank in accordance with this Title. As soon as practicable after

taking possession the Commissioner shall make an inventory of the assets and file a copy thereof with the

District Court of Guam.

(d) When the Commissioner has taken possession there shall be a postponement until six (6) months

after the commencement of such possession of the date upon which any period of limitation fixed by a

statute or agreement would otherwise expire on a claim or right of action of the bank, or upon which an

appeal must be taken or a pleading or other document must be filed by the bank in any pending action or

proceeding.

(e) If, in the opinion of the Commissioner, an emergency exists which will result in serious losses to

the depositors, he may take possession of a territorial bank without a prior hearing. Within ten (10) days

after the Commissioner has taken possession any interested party may file an application with the Board

for an order vacating such possession. The Board shall grant the application if it finds that the action of the

Commissioner was unauthorized under this Title.

(f) If the Commissioner shall determine to liquidate the territorial bank, he shall give such notice of

his determination to the directors, stockholders, depositors and creditors as the Board may prescribe. Any

objection to the liquidation shall be filed with the Board within thirty (30) days after such notice. Unless

within thirty (30) days thereafter the Board issues an order staying the liquidation, the Commissioner shall

proceed to liquidate the institution.

(g) If the Commissioner determines to reorganize the territorial bank, or the Board after staying its

liquidation, orders such reorganization, the Commissioner, after according a hearing to all interested parties,

shall enter an order proposing a reorganization plan. A copy of the plan shall be sent to each depositor and

creditor who will not receive payment of his claim in full under the plan together with notice that unless

within thirty (30) days the plan is disapproved in writing by persons holding one-third or more of the

aggregate amount of such claims, the Commissioner will proceed to effect the reorganization. A department

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or agency of the government of Guam holding a claim which will not be paid in full is authorized to

participate as any other creditor.

(h) No judgment, lien or attachment shall be executed upon any asset of the territorial bank while it is

in the possession of the Commissioner. Upon the election of the Commissioner in connection with a

liquidation or reorganization:

(1) Any lien or attachment, other than an attorney’s or mechanic’s lien, obtained upon any asset

of the territorial bank during the Commissioner’s possession or within four (4) months prior to

commencement thereof shall be vacated except liens created by the Commissioner while in possession.

(2) Any transfer of an asset of the territorial bank made after or in contemplation of its insolvency

with intent to effect a preference shall be voided.

(i) With the approval of the Board, the Commissioner may borrow money in the name of the territorial

bank and may pledge its assets as security for the loan.

(j) All necessary and reasonable expenses of the Commissioner’s possession of a territorial bank and

of its reorganization or liquidation shall be defrayed from the assets thereof.