Guam § 160306 - Commissioner in Possession.

§ 160306. Commissioner in Possession.

(a) The Commissioner may take possession of a Trust Company if,

after a hearing, the Commissioner 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; or

(4) its examination has been obstructed or impeded.

(b) The Commissioner shall take possession by posting upon the

premises a notice reciting that the Commissioner is assuming possession

pursuant to this Act, and the time, not earlier than the posting of the

notice, when the Commissioner’s possession shall be deemed to

commence. A copy of the notice shall be filed in the U.S. District Court

of Guam. The Commissioner shall notify the trustor of all the trusts

under the management of the Trust Company.

(c) When the Commissioner has taken possession of a Trust

Company, the Commissioner 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 Trust Company, to commence, defend and

conduct in its name any action or proceeding in which it may be a party,

to terminate the Commissioner’s possession by restoring the Trust

Company to its board of directors and to reorganize or liquidate the Trust

Company in accordance with this Act. As soon as practicable after taking

possession, the Commissioner shall make an inventory of the assets and

file a copy thereof with the U.S. District Court of Guam.

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(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 Trust Company, or upon which an appeal must be taken or a

pleading or other document must be filed by the Trust Company 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 trustors and creditors, the

Commissioner may take possession of the Trust Company without a

prior hearing. Within ten (10) days after the Commissioner has taken

possession, any interested party may file an application with the U.S.

District Court of Guam for an order vacating such possession. The U.S.

District Court of Guam shall grant the application if it finds that the

action of the Commissioner was unauthorized under this Act.

(f) If the Commissioner shall determine to liquidate the Trust

Company, the Commissioner shall give such notice of the

Commissioner’s determination to the directors, stockholders and the

trustors. Any objection to the liquidation shall be filed with the U.S.

District Court of Guam within thirty (30) days after such notice. Unless

within thirty (30) days thereafter, the U.S. District Court of Guam issues

an order staying the liquidation, the Commissioner shall proceed to

liquidate the Trust Company.

(g) If the Commissioner determines to reorganize the Trust

Company, or the U.S. District Court of Guam, after staying its

liquidation, orders such reorganization, the Commissioner, after

according a hearing to all interested parties, shall propose a

reorganization plan. A copy of the Plan shall be sent to each trustor and

creditor who will not receive payment of the Commissioner’s claim in

full under the Plan, together with notice. Unless within thirty (30) days

the Plan is disapproved in writing by persons holding one-third (1/3) or

more of the aggregate amount of such claims, the Commissioner will

proceed to effect the reorganization. A department 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 Trust Company while it is in the possession of the

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Commissioner. Upon the election of the Commissioner in connection

with a liquidation or reorganization:

(1) any lien or attachment, other than a mechanic=s lien,

obtained upon any asset of the Trust Company 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; and

(2) Any transfer of an asset of the Trust Company made after

or in contemplation of its insolvency with intent to effect a

preference shall be voided.

(i) With the approval of the U.S. District Court of Guam, the

Commissioner may borrow money in the name of the Trust Company

and may pledge its assets as security for the loan.

(j) All necessary and reasonable expenses of the Commissioner=s

possession of a Trust Company and of its reorganization or liquidation

shall be defrayed from the assets thereof.