12 U.S.C. § 2279cc — Conservatorship; liquidation; receivership
submitted 30 years ago by Pub. L. 92-181 to r/title-12-BANKS-AND-BANKING · 1,361 words · no verdicts yet
The Corporation may liquidate voluntarily with Farm Credit Administration approval, or may be placed into conservatorship or receivership under specified conditions. The section sets appointment, compensation, borrowing, judicial-review, claims, reporting, and termination rules.
(a) The Corporation* may voluntarily liquidate only with the Farm Credit* Administration Board’s consent and under a Board*-approved liquidation plan. (b)(1) The Board may appoint a conservator or receiver under section 2183(b). (2) For the Corporation, insolvency also means inability to pay debts in the ordinary course; a conservator may be appointed if authority to buy qualified loans or issue or guarantee* loan-backed securities is suspended; and a receiver may be appointed if that authority is suspended or the Corporation is Level III or IV and alternative part B actions are unsatisfactory, and the Farm Credit Administration finds a conservator inappropriate. (3) These conservator grounds supplement section 2279bb–6. (c)(1) A conservator or receiver may be the Farm Credit Administration, another government entity or employee including the Farm Credit System Insurance Corporation, or a conflict-free person* with needed financial and management expertise. (2)(A) The conservator, receiver, and non-Federal professionals assisting them may be paid. (B) Pay may not exceed comparable Federal pay, unless the Farm Credit Administration finds higher private-sector rates necessary to recruit and retain competent personnel. (C) The conservator or receiver may contract with government entities for personnel, services, and facilities on mutually agreed terms and compensation. (3) Valid conservatorship or receivership expense claims and valid claims for subsection (f) loans are paid from Corporation funds before other valid claims and may receive a priority lien. (4) A non-Federal conservator or receiver is not personally liable for tort or other damages for actions in the role unless grossly negligent or intentionally tortious or criminal. (5) The Farm Credit Administration may allow indemnification from conservatorship or receivership assets. (d)(1) Within 30 days after appointment, the Corporation may sue in the District of Columbia federal court to require removal. The court must dismiss on the merits or direct removal. (2) Other authorized actions involving the Corporation must be stayed while that case is pending. (e) The conservator or receiver has powers provided by Farm Credit Administration Board regulations, comparable to section 2183(b) powers. (f)(1) If needed for administrative expenses or liquidity for maturing obligations, the conservator or receiver may borrow in amounts, from sources, and at rates considered necessary. (2) A Farm Credit bank may lend for such borrowing or, in receivership, buy Corporation assets. (g) An agreement reducing or defeating the conservator’s or receiver’s interest in an acquired asset is invalid unless it is written; executed contemporaneously by the Corporation and the adverse claimant including the obligor; approved by the Board or appropriate committee with approval recorded in minutes; and continuously kept as an official Corporation record. (h) If the receiver determines receivership assets cannot pay all valid claims, the receiver must report the receivership’s financial condition to the Treasury Secretary and the House and Senate Agriculture Committees. (i)(1) After receivership, by a Board-determined date no later than the receivership’s conclusion and receiver’s discharge, the Corporation’s charter must be canceled and this subchapter’s authority ends. (2) By that deadline, the Office of Secondary Market Oversight must be abolished and section 2279aa–11(a) and part B cease to have effect.
The Corporation* may voluntarily liquidate only with the consent of, and in accordance with a plan of liquidation approved by, the Farm Credit* Administration Board*.
The Farm Credit Administration Board may appoint a conservator or receiver for the Corporation under the circumstances specified in section 2183(b) of this title.
In applying section 2183(b) of this title to the Corporation under paragraph (1)—
the Corporation shall also be considered insolvent if the Corporation is unable to pay its debts as they fall due in the ordinary course of business;
a conservator may also be appointed for the Corporation if the authority of the Corporation to purchase qualified loans or issue or guarantee* loan-backed securities is suspended; and
a receiver may also be appointed for the Corporation if—
the authority of the Corporation to purchase qualified loans or issue or guarantee loan-backed securities is suspended; or
the Corporation is classified under section 2279bb–4 of this title as within level III or IV and the alternative actions available under part B are not satisfactory; and
the Farm Credit Administration determines that the appointment of a conservator would not be appropriate.
The grounds for appointment of a conservator for the Corporation under this subsection shall be in addition to those in section 2279bb–6 of this title.
Notwithstanding section 2183(b) of this title, if a conservator or receiver is appointed for the Corporation, the conservator or receiver shall be—
the Farm Credit Administration or any other governmental entity or employee, including the Farm Credit System Insurance Corporation; or
any person* that—
has no claim against, or financial interest in, the Corporation or other basis for a conflict of interest as the conservator or receiver; and
has the financial and management expertise necessary to direct the operations and affairs of the Corporation and, if necessary, to liquidate the Corporation.
A conservator or receiver for the Corporation and professional personnel (other than a Federal employee) employed to represent or assist the conservator or receiver may be compensated for activities conducted as, or for, a conservator or receiver.
Compensation may not be provided in amounts greater than the compensation paid to employees of the Federal Government for similar services, except that the Farm Credit Administration may provide for compensation at higher rates that are not in excess of rates prevailing in the private sector if the Farm Credit Administration determines that compensation at higher rates is necessary in order to recruit and retain competent personnel.
The conservator or receiver may contract with any governmental entity, including the Farm Credit System Insurance Corporation, to make personnel, services, and facilities of the entity available to the conservator or receiver on such terms and compensation arrangements as shall be mutually agreed, and each entity may provide the same to the conservator or receiver.
A valid claim for expenses of the conservatorship or receivership (including compensation under paragraph (2)) and a valid claim with respect to a loan made under subsection (f) shall—
be paid by the conservator or receiver from funds of the Corporation before any other valid claim against the Corporation; and
may be secured by a lien, on such property of the Corporation as the conservator or receiver may determine, that shall have priority over any other lien.
If the conservator or receiver for the Corporation is not a Federal entity, or an officer or employee of the Federal Government, the conservator or receiver shall not be personally liable for damages in tort or otherwise for an act or omission performed pursuant to and in the course of the conservatorship or receivership, unless the act or omission constitutes gross negligence or any form of intentional tortious conduct or criminal conduct.
The Farm Credit Administration may allow indemnification of the conservator or receiver from the assets of the conservatorship or receivership on such terms as the Farm Credit Administration considers appropriate.
Notwithstanding subsection (i)(1), not later than 30 days after a conservator or receiver is appointed under subsection (b), the Corporation may bring an action in the United States District Court for the District of Columbia for an order requiring the Farm Credit Administration Board to remove the conservator or receiver. The court shall, on the merits, dismiss the action or direct the Farm Credit Administration Board to remove the conservator or receiver.
On the commencement of an action under paragraph (1), any court having jurisdiction of any other action or enforcement proceeding authorized under this chapter to which the Corporation is a party shall stay the action or proceeding during the pendency of the action for removal of the conservator or receiver.
The conservator or receiver for the Corporation shall have such powers to conduct the conservatorship or receivership as shall be provided pursuant to regulations adopted by the Farm Credit Administration Board. Such powers shall be comparable to the powers available to a conservator or receiver appointed pursuant to section 2183(b) of this title.
If the conservator or receiver of the Corporation determines that it is likely that there will be insufficient funds to pay the ongoing administrative expenses of the conservatorship or receivership or that there will be insufficient liquidity to fund maturing obligations of the conservatorship or receivership, the conservator or receiver may borrow funds in such amounts, from such sources, and at such rates of interest as the conservator or receiver considers necessary or appropriate to meet the administrative expenses or liquidity needs of the conservatorship or receivership.
A Farm Credit bank may loan funds to the conservator or receiver for a loan authorized under paragraph (1) or, in the event of receivership, a Farm Credit bank may purchase assets of the Corporation.
No agreement that tends to diminish or defeat the right, title, or interest of the conservator or receiver for the Corporation in any asset acquired by the conservator or receiver as conservator or receiver for the Corporation shall be valid against the conservator or receiver unless the agreement—
is in writing;
is executed by the Corporation and any person claiming an adverse interest under the agreement, including the obligor, contemporaneously with the acquisition of the asset by the Corporation;
is approved by the Board or an appropriate committee of the Board, which approval shall be reflected in the minutes of the Board or committee; and
has been, continuously, from the time of the agreement’s execution, an official record of the Corporation.
On a determination by the receiver for the Corporation that there are insufficient assets of the receivership to pay all valid claims against the receivership, the receiver shall submit to the Secretary of the Treasury, the Committee on Agriculture of the House of Representatives, and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report on the financial condition of the receivership.
The charter of the Corporation shall be canceled, and the authority provided to the Corporation by this subchapter shall terminate, on such date as the Farm Credit Administration Board determines is appropriate following the placement of the Corporation in receivership, but not later than the conclusion of the receivership and discharge of the receiver.
The Office of Secondary Market Oversight established under section 2279aa–11 of this title shall be abolished, and section 2279aa–11(a) of this title and part B shall have no force or effect, on such date as the Farm Credit Administration Board determines is appropriate following the placement of the Corporation in receivership, but not later than the conclusion of the receivership and discharge of the receiver.
Source credit: (Pub. L. 92–181, title VIII, § 8.41, as added Pub. L. 104–105, title I, § 118, Feb. 10, 1996, 110 Stat. 168.)
- 1996Enacted · Pub. L. 92-181 · 110 Stat. 168
A history note hasn’t been published yet. The record shows enactment by Pub. L. 92-181 on 1996-02-10.
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