12 U.S.C. § 5386 — Mandatory terms and conditions for all orderly liquidation actions
submitted 16 years ago by Pub. L. 111-203 to r/title-12-BANKS-AND-BANKING · 183 words · no verdicts yet
For an orderly liquidation action, the Corporation must act for United States financial stability, protect the priority of claims and the Fund, remove responsible management and directors, and avoid taking an ownership interest.
When acting under this subchapter, the Corporation must: (1) determine that the action is needed for the financial stability of the United States, not to preserve the covered financial company*; (2) ensure shareholders are not paid until every other claim* and the Fund* are fully paid; (3) ensure unsecured creditors bear losses according to section 5390’s claim priorities; (4) ensure management responsible for the company’s failure is removed if it has not already been removed; (5) ensure directors or similar governing-body members responsible for the failure are removed if they have not already been removed; and (6) not take an equity interest in, or become a shareholder of, a covered financial company* or covered subsidiary*.
In taking action under this subchapter, the Corporation shall—
determine that such action is necessary for purposes of the financial stability of the United States, and not for the purpose of preserving the covered financial company*;
ensure that the shareholders of a covered financial company* do not receive payment until after all other claims and the Fund* are fully paid;
ensure that unsecured creditors bear losses in accordance with the priority of claim* provisions in section 5390 of this title;
ensure that management responsible for the failed condition of the covered financial company* is removed (if such management has not already been removed at the time at which the Corporation is appointed receiver);
ensure that the members of the board of directors (or body performing similar functions) responsible for the failed condition of the covered financial company are removed, if such members have not already been removed at the time the Corporation is appointed as receiver; and
not take an equity interest in or become a shareholder of any covered financial company or any covered subsidiary*.
Source credit: (Pub. L. 111–203, title II, § 206, July 21, 2010, 124 Stat. 1459.)
- 2010Enacted · Pub. L. 111-203 · 124 Stat. 1459
A history note hasn’t been published yet. The record shows enactment by Pub. L. 111-203 on 2010-07-21.
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