Vermont § 36101 - Suspension, voluntary liquidation, and involuntary liquidation

§ 36101. Suspension, voluntary liquidation, and involuntary liquidation

• (a) Suspension. If it appears that any credit union is bankrupt or insolvent or that it has willfully
  violated this chapter or is operating in an unsafe or unsound manner, the Commissioner
  shall issue an order temporarily suspending the credit union’s operations for not
  more than 60 days. The governing body shall be given notice by registered mail of
  the suspension, which notice shall include a list of the reasons for the suspension
  or a list of the specific violations of this chapter. The Commissioner shall also
  notify the insuring organization of any suspension. Upon receipt of the suspension
  notice, the credit union shall immediately cease all operations. The directors of
  the credit union shall then file with the Commissioner a reply to the suspension notice,
  request a hearing to present a plan of corrective actions proposed if they desire
  to continue operations, or request that the credit union be declared insolvent and
  a liquidating agent appointed. If the credit union fails to answer the suspension
  notice or request a hearing with the Commissioner, the Commissioner may then revoke
  the credit union’s charter, appoint a liquidating agent, and liquidate the credit
  union in accordance with subsection (d) of this section. (b) Voluntary liquidation. At a meeting specially called to consider the matter, a majority of the entire membership
  may vote to dissolve the credit union if a copy of the notice was mailed to the members
  of the credit union at least 10 days prior to the meeting. Any member not present
  at the meeting may within the next 20 days vote in favor of dissolution by signing
  a statement in a form approved by the Commissioner, and the vote shall have the same
  force and effect as if cast at the meeting. The credit union shall thereupon immediately
  cease to do business except for the purposes of liquidation, and the chairperson of
  the governing body and secretary shall, within five days following the meeting, notify
  the Commissioner of the credit union’s intention to liquidate and shall include in
  the notification a list of the names and addresses of the directors and officers of
  the credit union. (c) Involuntary liquidation. If the Commissioner, after issuing notice of suspension and providing an opportunity
  for a hearing, rejects the credit union’s plan to continue operations, the Commissioner
  may issue a notice of involuntary liquidation and appoint a liquidating agent. The
  credit union may request a stay of execution of that action by appealing to the Superior
  Court of Washington County. Involuntary liquidation may not be ordered before the
  suspension procedures outlined in subsection (a) of this section are completed. (d) Liquidating procedure. The credit union shall continue in existence for the purpose of discharging its debts,
  collecting and distributing its assets, and doing all acts required in order to wind
  up its business and may sue and be sued for the purpose of enforcing those debts and
  obligations until its affairs are fully adjusted. The governing body or, in the case
  of involuntary dissolution, the liquidating agent shall use the assets of the credit
  union to pay: first, expenses incidental to liquidation including any surety bond
  that may be required; second, any liability due nonmembers; third, deposits and savings
  club accounts as provided in this chapter. Assets then remaining shall be distributed
  to the members proportionately to the shares held by each member as of the date liquidation
  was voted. As soon as the governing body or the liquidating agent determines that
  all assets from which there is a reasonable expectancy of realization have been liquidated
  and distributed as set forth in this section, it shall execute a certificate of liquidation
  on a form prescribed by the Commissioner and file it with the Secretary of State.
  The certificate shall, after filing or recording and indexing, be forwarded to the
  Commissioner whereupon the credit union shall be dissolved. (e) NCUA as liquidating agent. In the case in which the administrator of the National Credit Union Administration
  is appointed liquidating agent, the Administrator shall have the right to be subrogated
  to the rights of the members of the liquidating credit union. (Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 344, eff. July 1, 2022.)