1155.26 Authority of board of trustees where closed association unlikely to qualify for federal insurance.

(A) If the board of trustees of the savings and loan assurance corporation, with the approval of the superintendent, determines that a building and loan association is unlikely to qualify for insurance from the federal savings and loan insurance corporation (FSLIC), the federal deposit insurance corporation (FDIC), or the national credit union administration (NCUA), and that such association has not opened pursuant to divisions (A) to (D) of section 1155.22 of the Revised Code as enacted by Amended Substitute Senate Bill No. 119 of the 116th general assembly, the board of trustees may, upon petition of creditors, depositors or members holding two-thirds of the dollar amount of its debt, permit that up to twenty per cent of the claims of creditors, depositors or members of the association, as estimated by the board of trustees, be converted ratably to securities of such association or be pledged to FSLIC, FDIC, or NCUA, or both, if the board of trustees further finds that such creditors, depositors or members of such association would be likely to receive, upon liquidation, less than their stated claims, exclusive of claims as holders of securities or pledged deposits or accounts, after giving effect to such conversion or pledge.

(B) The board of trustees, with the approval of the superintendent, is authorized to create and determine the terms of such securities or pledge, and to take all other action necessary to carry out the purposes of this section as if the superintendent had the rights, powers, and authority of officers and directors of the association in question, and all voting rights of the members or stockholders of such association.

(C) Any action proposed to be taken by the board of trustees, with the approval of the superintendent pursuant to division (A) of this section is subject to approval by the court of common pleas of the county in which the principal office of such association is located upon such period for notice as such court deems necessary or appropriate in the circumstances, which period in no event will exceed seven business days, and such approval may be given without any notice or opportunity for hearing whatsoever. Any findings of fact by the superintendent, if supported by substantial evidence, shall be conclusive. Any action assented to by the holders of two-thirds in principal amount of the aggregate of the claims of the creditors shall be approved by the court.

(D) Any action authorized by this section may be taken in connection with the sale or merger of such association or the sale of all or a substantial part of its assets and the assumption of all or a substantial part of its liabilities.

Effective Date: 04-06-1985