SEC. 81-11-91. Appointment, powers and duties of conservator for associations not having deposits insured by a federal or state agency.
(1) Notwithstanding the provisions of any law of the State of Mississippi to the contrary, any association which does not have its deposits insured by the Federal Savings and Loan Insurance Corporation or by some other federal agency or an agency of this state established for the purpose of insuring savings accounts in associations is hereby prohibited from transacting any further business upon June 20, 1976, except such business as may be authorized by the conservator appointed under the provisions of this section; except that, prior to the appointment of a conservator, the provisions of this section shall not apply to the acceptance of deposits to accounts or to the collection of payments on outstanding loans or other obligations and any such association shall be authorized to conduct business to that extent.
(2) In order to protect the rights of depositors, the chief justice of the supreme court of the State of Mississippi, or in his absence, the presiding justice of such court having the longest tenure, is hereby authorized and requested, as soon as practicable after June 20, 1976, but not later than July 1, 1976, to appoint a conservator, who shall be a special master of the court, for all associations which do not have their deposits insured by the Federal Savings and Loan Insurance Corporation or by some other federal agency or an agency of this state established for the purpose of insuring savings accounts in associations, including those associations now operating under a receivership. Notwithstanding the provisions of section 81-11-41, exclusive jurisdiction and full control and supervision of any association under receivership upon the appointment of the conservator is hereby transferred to the conservator. The receiver or receivers of any such association shall promptly submit a final account and petition for discharge to the chancery court in which such receivership was formerly pending, and upon approval of same by the court, the receiver or receivers and the sureties on their bonds shall be thereupon discharged and dismissed. The conservator shall serve at the will and pleasure of the appointing officer and shall receive a reasonable compensation for services rendered by him in an amount set by the appointing officer, or as fixed by law, and shall carry out the duties as hereinafter specifically set forth, and such other duties as may be imposed by the appointing officer. Such compensation and expenses incurred in performance of the duties imposed hereunder may be paid from funds appropriated for that purpose or by a charge against the associations under his jurisdiction to be apportioned among them in an equitable manner; provided that any funds expended from any such state appropriation shall be reimbursed to the state by a charge against the associations under his jurisdiction to be apportioned among them in an equitable manner; provided further that such charges shall be a preferred debt in the case of a liquidation in which case such charges shall then receive the same priority as other debts and payments, such as those due depositors. The control of the conservator appointed pursuant to this section shall cease immediately as to any association which has complied with the requirements of section 81-11-81 (2), and the conservator shall notify the appointing officer and the board of such action. The termination of the conservator's authority shall not affect the obligations of such association to pay its part of any apportioned expenses incurred prior to termination.
The conservator shall, before entering upon the discharge of the duties of his office, take and subscribe the oath set forth in Section 268 of the Constitution.
If required by the appointing officer, the conservator shall, before entering upon the duties of his office, execute a good and sufficient bond payable to the State of Mississippi in the sum of fifty thousand dollars ($50,000.00), said bond to be conditioned for the faithful discharge of his duties, the premiums on said bond to be paid from funds appropriated for this office.
The conservator shall have all the powers and duties authorized by law for receivers and masters, and those powers specifically granted herein to him in his capacity as conservator. The conservator shall have the following powers and duties:
(a) To ascertain the financial condition of each association under his jurisdiction;
(b) To assist associations in taking the actions necessary to provide insurance of their deposits as required by this chapter;
(c) To assist each association in the preparation of plans which will qualify if for the required insurance; and, in his discretion, to prepare and propose such a plan for any such association, if feasible;
(d) to protect the depositors in the preparation of any plan;
(e) To secure such assistance and staff as may be reasonably necessary, including, but not limited to, attorneys, certified public accountants and consultants;
(f) To pay the salaries of necessary officers and employees and to pay the necessary costs of operation of the associations under his control;
(g) To pay any insurance premiums and taxes due from any escrow account established for such purposes;
(h) In his discretion, to pay the expenses incurred by each association in becoming qualified for deposit insurance;
(i) To take the necessary action to collect payment on outstanding loans and other action necessary for management of existing loans and the protection of the assets of the association;
(j) To honor prior commitments for construction loans when good business practice would indicate that the project can be completed within the outstanding commitment and that the honoring of such commitment would not adversely affect the position of the depositors;
(k) To invest available funds in time deposits of banks whose accounts are insured by the Federal Deposit Insurance Corporation, in shares of associations whose accounts are insured by the Federal Savings and Loan Insurance Corporation, in United States Treasury bills or obligations guaranteed in full as to principal and interest by the United States of America or any agency thereof;
(l) To allow interest to accrue on all deposits in an association which he determines is solvent; provided, however, no interest shall accrue on accounts with respect to which an application for withdrawal of deposits has been filed until the expiration of thirty (30) days after the date of such filing;
(m) To assume and perform any and all duties of the directors, officers and managers that he deems necessary with plenary power and authority to do and perform all acts and things in the conduct, management and operation of any association under his control and supervision that he deems necessary for the benefit and protection of the depositors thereof;
(n) To permit an association to conduct all or any portion of the business activities which it would otherwise conduct, when and to the extent that the conservator shall determine that the financial stability of the association will not be adversely affected, but only upon such terms and conditions as the conservator may prescribe; provided that the conservator shall permit the acceptance and withdrawal of deposits only if he determines that the association has sufficient liquidity of assets to meet its reasonably anticipated requirements; letters of credit from members of a Federal Reserve Bank or from members of a Federal Home Loan Bank may be considered in determining liquidity of assets; provided, further, that all or any portion of such business activities may be again restricted at any time deemed necessary to preserve financial stability and carry out the purposes of sections 81-11-5, 81-11-81, and 81-11-91 to 81-11-95;
(o) To certify to the board not later than April 1, 1977, the names of any associations which have not met the insurance requirements of this chapter;
(p) To intervene in any lawsuits, the outcome of which could affect his duties as conservator or which could affect the assets of any association under his jurisdiction;
(q) To conserve the assets of the associations and to sell the assets only in the ordinary course of business or to accomplish a reorganization plan approved under the provisions of this subsection;
(r) To request and utilize the services of any employees of the United States government or any agency thereof;
(s) To exercise the same duties, powers and responsibilities as a special master of a court of equity.
It shall be the duty of all state officers and agencies to cooperate with the conservator in the performance of his duties and responsibilities as herein set forth, including temporary assignment of personnel upon the conservator's request. The conservator shall not compensate any public official acting at his request in the reorganization of any state savings and loan association, including but not limited to, legal fees or any other type of remuneration.
During the period the conservator shall exercise control of an association pursuant to this section, no claim of set-off shall be asserted against a debt due said association.
(3) The conservator may formulate or consider plans of action to be followed by the savings and loan associations under his authority to effect compliance with the requirements of section 81-11-81 (2). Any plan so formulated or approved by the conservator shall be submitted to the shareholders (depositors) of an association, using the following procedure:
(a) The conservator shall, by first-class mail, postage prepaid, send to each shareholder (depositor):
(i) A copy of the proposed plan together with a full and fair description of the plan and an explanation of its effect upon shareholders (depositors), which is neither materially incomplete nor misleading;
(ii) A form for the registering of such shareholder's (depositor's) vote in favor of or against the adoption of such plan, such form to specify the date and hour on or before which responses must be received by the conservator in order to be counted, together with a return envelope addressed to the conservator. In the determination of such questions each shareholder (depositor) shall be entitled to one (1) vote, plus an additional vote for each one hundred dollars ($100.00) or fraction thereof of the withdrawal value of share accounts;
(b) The votes shall be cast on the forms furnished for such purpose pursuant to subsection (a)(ii) and shall be counted on the date specified on the form mailed under the provisions of said subsection, such date to be not less than twenty (20) days from the date of mailing by the conservator. Should more than fifty percent (50%) of the authorized votes be cast in favor of the proposed plan, the conservator may proceed to implement the plan subject to the provisions of subsection (3)(c) of this section;
(c) If approved by the shareholders (depositors), the conservator shall consider and approve the plan and shall submit said plan with his recommendation to the chief justice of the Mississippi Supreme Court or to a presiding justice thereof for his approval or disapproval. If, subsequent to the approval of such plan, the plan or any portion thereof shall come before the Mississippi Supreme Court on appeal from any court, the approving justice shall recuse himself from consideration of the matter;
(d) Should such proposed plan receive the approval of the shareholders (depositors), as well as that of the chief justice or presiding justice, the plan shall be implemented by the conservator as soon as is practicable.
Any plan formulated according to the provisions hereof shall provide for any and all matters including, but not limited to the following: (i) adjustment of interest rates on debt, and (ii) adjustment of priorities among debt securities and conversion of debt securities into preferred or nonpreferred equity securities necessary to enable an association to meet the requirements of section 81-11-81, and (iii) the adjustment of voting rights in all of the affairs of the association as between owners or holders of capital stock of stock companies and shareholders (depositors) agreeing or required to subordinate any debt security, if the conservator deems it necessary to fully protect the interests of shareholders (depositors).
Neither the adoption and implementation of any such plan nor any other action taken or authorized under the provisions of sections 81-11-5, 81-11-81, and 81-11-91 to 81-11-93, should be construed to relieve any insurance company from any liability which it would otherwise have had to the shareholders (depositors) of any association and all statutes of limitation or time limitations provided in any such policies are hereby suspended to the extent made necessary by the adoption or implementation of any such plan or other action taken under the provisions of sections 81-11-5, 81-11-81, and 81-11-91 to 81-11-95, in order to preserve shareholder's (depositor's) rights under all such policies, and the provisions of this paragraph shall likewise be applicable to any rights which shareholders (depositors) may now have or which may hereafter accrue, or which otherwise would have accrued to shareholders (depositors) under the provisions of Mississippi Insurance Guaranty Association Law, being sections 83-23-101 through 83-23-131.
If prior to June 20, 1976, in the determination of the conservator, any association has initiated a merger or other consolidation which will, if approved, enable such association to meet the requirements of section 81-11-81 (2), the conservator may, after a determination that the shareholders' (depositors') rights would not be adversely affected, either before or after such pending merger is ratified by the shareholders and stockholders of such association, authorize such association to obtain approval by its shareholders under and in accordance with the applicable provisions of law in effect prior to June 20, 1976, rather than under the method of ratification hereinabove provided.
During the period that the conservator shall exercise control of all or any one of the associations pursuant to sections 81-11-5, 81-11-81, and 81-11-91 to 81-11-95, no insurance company insuring shareholder (or depositor) accounts in any such association shall be subject to any civil action within the State of Mississippi arising out of its contract of insurance of such accounts nor shall any such insurance company dispose of any of its assets, pay any claims, redeem any stock or make a refund with respect to any insured account within the State of Mississippi without the prior approval of the conservator. The applicable statutes of limitation shall be tolled during such time as any shareholder (or depositor) or association shall be precluded from bringing a civil action under the provisions hereof.
During the period that the conservator shall exercise control of all or any one of the associations pursuant to sections 81-11-5, 81-11-81, and 81-11-91 to 81-11-95, no funds, or assets, or securities on deposit with any agency of the State of Mississippi, as required by law, by any domestic insurance companies which engage in the insuring of savings share accounts and savings deposits as defined in section 83-19-31, Mississippi Code of 1972, shall be paid out or otherwise disbursed without prior written approval of the conservator.
All acts performed by the conservator and those acting under his authority, direction and supervision pursuant hereto shall be deemed in the public interest and for a governmental purpose, shall be absolutely privileged, and the sovereign immunity of the State of Mississippi shall extend to all such acts. The conservator and his assistants, staff, consultants, auditors, appraisers and employees shall be immune from civil suit for any conduct arising out of the performance of their official duties.
During such time as any association shall be under the control of the conservator as provided in this section, such association shall not be subject to any civil actions, and during such time the applicable statutes of limitations shall be tolled.
SOURCES: Laws, 1976, 1st Ex Sess, ch. 4, Sec. 2; 1977, ch. 301, eff from and after passage (approved January 24, 1977).
SECTION 12. Section 81-11-91, Mississippi Code of 1972, which provides for the appointment, powers and duties of a conservator for savings associations not having deposits insured by a federal or state agency, is hereby repealed.
SOURCE: 1997 Laws, Chapter 542, Sec. 12, SB2470, Effective AP-April 10, 1997.