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Minnesota Legislature

Office of the Revisor of Statutes

49.24 PROCEDURE IN LIQUIDATION.
    Subdivision 1. Inventory. Upon taking possession of the property and assets of any financial
institution the commissioner shall make an inventory of the assets of such financial institution,
in duplicate, one to be filed in the office of the commissioner and one in the office of the court
administrator of the district court, and thereupon the district court shall assume jurisdiction for the
purpose of taking such action as is provided for in sections 49.24 to 49.32.
    Subd. 2. Collection of debts; compromise of debts and sale of property. The commissioner
shall collect all debts due and all claims belonging to such financial institution. Whenever the
commissioner is of the opinion that a debt due such financial institution is bad or doubtful the
commissioner may present a verified petition to a judge of the district court setting forth the
facts; and the judge if satisfied that it is for the best interests of the creditors may hear such
petition without notice and make an order granting such petition and authorizing the petitioner to
sell, compound, or compromise such debt. Personal property or real estate may be sold on like
petition, approval, and order. If a petition for the sale of real estate is presented, the judge may
require that notice of a hearing thereon be given to the creditors by publication in such manner as
the judge orders. The commissioner may compromise bad or doubtful debts and sell personal
property having a book value, as shown by the commissioner's inventory, of not to exceed $200
without such order.
    Subd. 3. Attorneys. Upon the request of the commissioner in writing the attorney general
shall employ a special attorney to act as counsel in all matters relating to the liquidation of each
financial institution, which appointment shall be made according to the provisions of the statutes
regulating the employment by the attorney general of special attorneys for state boards and
officers, and the payment of such attorney shall be made in the manner provided in subdivision 7
for the payment of compensation and expenses in liquidation of financial institutions.
    Subd. 4. Notice to file claims. The commissioner shall cause notice to be given by
advertisement in a legal newspaper in the city where such financial institution had its principal
place of business prior to liquidation, or, if none in such city, then in the county, weekly for five
consecutive weeks, calling on all persons who may have claims against such financial institution
to present the same to the commissioner, and make legal proof thereof at a place and within a
time not earlier than one week after the last day of publication, which time and place shall be
specified in said notice. The commissioner shall mail a similar notice to all persons whose names
appear as creditors upon the books of the financial institution.
    Subd. 5. Rejection of claims; actions; limitations. If the commissioner doubts the justice or
validity of any claim, the commissioner may reject the same in whole or in part and serve notice
of such rejection upon the claimant, either by mail or personally. An affidavit of the service of
such notice made according to law shall be filed with the commissioner. An action upon a claim
so rejected must be brought within 60 days after such service and the filing of proof thereof. The
venue of such action shall be in the county in which such financial institution had its principal
place of business prior to liquidation, and such action shall be brought jointly against the financial
institution and the commissioner or receiver or liquidator appointed by the commissioner as
statutory liquidator thereof. Any person having a claim against such financial institution which is
not presented and filed within the time fixed in the notice to creditors may thereafter present the
same and the commissioner shall allow or reject the same in whole or in part and give notice of
any rejection, as hereinbefore provided. Suit on any such claim not filed within the time fixed
by the notice which is rejected must be brought within 30 days after the service and filing of
proof of such rejection. Any claim not filed within the time fixed in the notice to creditors but
later received and filed as by this section provided and duly allowed, shall participate and share in
such dividends only as shall be paid from the proceeds of those assets remaining undistributed
at the time of filing of such claim, and any claim not filed prior to the declaration of a final
dividend shall be barred. No action shall be commenced against any such financial institution
after possession of the business and property thereof has been taken by the commissioner on any
claim until such claim has been filed with and rejected, in whole or in part, by the commissioner.
As to any action pending at the time the commissioner takes possession of the business and
property of such financial institution which has been stayed by order of the court, a claim may
be filed for the subject matter of said action. If the claim be allowed, the action shall terminate
and be dismissed without costs and disbursements, but, if rejected in whole or in part, the stay
order shall be vacated, and the action may continue. No interest shall be allowed or paid on any
deposit or other claim from and after the closing of the financial institution and the taking over
of the same by the commissioner for purposes of liquidation.
    Subd. 6. Filing list of claims. Upon the expiration of the time fixed for the presentation
of claims, the commissioner shall make in duplicate a complete list of the claims presented,
including and specifying such claims as have been rejected by the commissioner, one such list to
be filed in the commissioner's office and one in the office of the court administrator of the district
court. The inventory and list of claims shall be open at all reasonable times to inspection.
    Subd. 7. Payment expenses of supervision and liquidation. All expenses of supervision
and liquidation and the compensation of legal counsel as fixed by the attorney general, shall
be paid upon the certificate of the commissioner out of the commissioner of commerce's
liquidation fund created by this section. The commissioner shall determine monthly the amount
of compensation paid to each employee for services in connection with the liquidation of each
financial institution and of all other expenses in connection therewith and thereupon shall pay
to the commissioner of finance from the assets of each such financial institution the amount so
determined, if such assets be sufficient to pay the amount of such compensation and expenses,
which shall be deposited in such commissioner of commerce's liquidation fund.
    Subd. 8. Deposit of moneys collected on liquidation. The money collected by the
commissioner shall be from time to time deposited in one or more state banks or trust companies,
and, in case of a suspension or insolvency of the depository, such deposit shall be preferred
before all of the deposits.
    Subd. 9. Dividends on claims. At any time after the expiration of the date fixed for the
presentation of claims the commissioner may, out of the funds remaining on hand after the
payment of expenses and amounts due to depositors, declare one or more dividends, and after the
expiration of one year from the first publication of notice to creditors, may declare a final dividend,
such dividends to be paid to such persons in such amounts as may be directed by the district court.
If any dividend on any claim shall be less than $1, the commissioner may hold that dividend
until it with subsequent dividends amounts to the sum of $1 or more. The commissioner shall pay
all dividends so withheld with the final dividend.
    Subd. 10. Objections to claims. Objections to any claim not rejected by the commissioner
may be made by any party interested by filing a copy of such objections with the commissioner,
who shall present the same to the district court at the time of the next application to declare a
dividend.
    Subd. 11.[Repealed, 1945 c 128 s 13]
    Subd. 12. Completion of liquidation after full payment of claims. Whenever the
commissioner shall have paid each and every depositor and other creditor of any financial
institution in liquidation (not including stockholders) whose claim or claims as such creditor
or depositor shall have been duly approved and allowed, and who can be located by the
commissioner for the purpose of making payment, the full amount of such claim or claims as
allowed, and shall have made proper provisions for any dividends or other moneys set apart for
the payment of claims remaining unpaid, and shall have paid all the expenses of the liquidation,
the commissioner shall call a meeting of the stockholders of such financial institution by giving
notice thereof for ten days by publishing such notice in one or more newspapers of the county
where it had its principal place of business prior to liquidation. At such meeting the stockholders
shall determine whether the commissioner shall be continued as liquidator and shall wind up the
affairs of such financial institution, or whether an agent or agents shall be elected for that purpose,
and in so determining the said stockholders shall vote by ballot, in person or by proxy, each
share of stock entitling the holder to one vote, and the majority of the stock shall be necessary
to a determination. In case it is determined to continue the liquidation under the commissioner,
the commissioner shall complete the liquidation of the affairs of such financial institution,
and after paying the expenses thereof, if there are proceeds of liquidation as yet undistributed
shall reimburse any stockholders who have paid stock assessments pursuant to any order for
assessment to the extent that each has paid, and if the proceeds are insufficient to reimburse
such paying stockholders in full, then in just proportion. Any proceeds remaining undistributed
after such paying stockholders have been reimbursed as by this subdivision provided shall be
distributed among all the stockholders in proportion to their several holdings of stock in such
manner and upon such notice as may be directed by the district court. In case it is determined
to appoint an agent or agents to liquidate, the stockholders shall thereupon select such agent or
agents by ballot, a majority of the stock present and voting, in person or by proxy, being necessary
to a choice. Such agent or agents shall execute and file with the commissioner a bond to the state
of Minnesota, in such amount, with such sureties, and in such form as shall be approved by the
commissioner, conditioned for the faithful performance of all the duties of trust, and thereupon the
commissioner shall transfer and deliver to such agent or agents all the undivided or uncollected
or other assets of such corporation then remaining in the commissioner's hands, and upon such
transfer and delivery the said commissioner shall be discharged from any and all further liability
to such financial institution and its creditors. Such agent or agents shall convert the assets into
cash and shall account for and make distribution of the property of such financial institution as is
herein provided in the case of distribution by the commissioner, except that the expenses thereof
shall be subject to the direction and control of the district court. In case of the death, removal
or refusal to act of any such agent, the stockholders, on the same notice as that after which they
were elected, and in the same way may elect a successor who shall have the same powers and be
subject to the same liabilities and duties as the agent originally elected.
    Subd. 13. Disposition of unclaimed dividends. Upon the liquidation of any financial
institution liquidated by the commissioner as statutory liquidator, if any dividends or other
moneys set apart for the payment of claims remain unpaid, and the places of residence of the
owners thereof are unknown to the commissioner, the commissioner may pay same into the
state treasury as hereinafter provided. Whenever the commissioner shall be satisfied that the
process of liquidation should not be further continued the commissioner may make and certify
triplicate lists of any such unclaimed dividends or other moneys, specifying the name of each
owner, the amount due, and the last known address. Upon one of such lists, to be retained by
the commissioner shall be endorsed the commissioner's order that such unclaimed moneys be
forthwith deposited in the state treasury. When so deposited, one of said lists shall be delivered
to the commissioner of finance and the commissioner shall retain in the commissioner's office
such records and proofs concerning said claims as the commissioner may have, which shall
thereafter remain on file in the office. The commissioner of finance shall execute upon the list
retained by the commissioner a receipt for such money, which shall operate as a full discharge
of the commissioner on account of such claims. At any time within six years after such receipt,
but not afterward, the claimant may apply to the commissioner for the amount so deposited for
the claimant's benefit, and upon proof satisfactory to the governor, the attorney general and
the commissioner, or to a majority of them, they shall give an order to the commissioner of
finance to issue a warrant for such amount, and such warrant shall thereupon be issued. If no such
claim be presented within six years, the commissioner shall so note upon the commissioner's
copy of said list and certify the fact to the commissioner of finance who shall make like entries
upon the commissioner of finance's corresponding lists; and all further claims to said money
shall be barred. Provided, that the commissioner of finance shall transfer to the commissioner of
commerce's liquidation fund created by this section not to exceed 50 percent of the amount so
turned over by the commissioner, to be used to partially defray expenses in connection with the
liquidation of closed banks and the conduct of the liquidation division, in such amounts and at
such times as the commissioner shall request.
There is hereby appropriated to the persons entitled to such amounts, from such moneys in
the state treasury not otherwise appropriated, an amount sufficient to make such payment.
    Subd. 14. Destruction of books and records. At any time after ten years from the date of
payment of the final dividend in liquidation of any financial institution the commissioner may
destroy all books and records of such financial institution which came into the commissioner's
care and custody at the time the commissioner took possession of the assets thereof, unless
requested by some interested party to preserve any such books or records for any purpose for
any period beyond such ten years.
    Subd. 15. Liquidation fund created. There is hereby created the commissioner of
commerce's liquidation fund, for the purpose of paying the expenses of liquidating financial
institutions and of conducting the Liquidation Division. Such fund shall consist of the moneys
transferred to it as herein provided, which are appropriated to the commissioner for the purposes
of this section. Such funds shall be kept in the state treasury and shall be paid out upon
authorization of the commissioner in the manner prescribed by law for moneys therein.
    Subd. 16. Transfers to liquidation fund. The following moneys shall be transferred to and
deposited in the commissioner of commerce's liquidation fund:
(1) All moneys paid to the commissioner of finance by the commissioner out of funds of
any financial institution in the commissioner's hands as reimbursement for services and expenses
pursuant to the provisions of subdivision 7.
(2) All moneys in the possession of the commissioner set aside for the purpose of meeting
unforeseen and contingent expenses incident to the liquidation of closed financial institutions,
which funds have been or shall be hereafter established by withholding portions of final
liquidating dividends in such cases.
(3) All moneys which the commissioner shall request the commissioner of finance to transfer
to such fund pursuant to the provisions of subdivision 13.
(4) All moneys in the possession of the commissioner now carried on the commissioner's
books in "stamp account," "suspense account," and "unclaimed deposit account."
(5) All moneys in the possession of the commissioner which the commissioner may be
authorized by order of any district court having jurisdiction of any liquidation proceedings to
transfer to such fund, or to use for any of the purposes for which the fund is established.
(6) All moneys in the possession of the commissioner carried on the commissioner's books
in the "unclaimed bonds account." At any time within six years after any bond the proceeds of
the sale of which constitute a portion of the moneys in this paragraph referred to came into the
possession of the commissioner as liquidator of any financial institution, any claimant thereto may
apply to the commissioner for the proceeds of the sale of such bond, and, upon proof satisfactory
to the governor, the attorney general, and the commissioner, or a majority of them, they shall give
an order to the commissioner of finance to issue a warrant for such amount, without interest, and
such warrant shall thereupon be issued and the amount thereof paid out of the commissioner of
commerce's liquidation fund. If no such claim be presented within such period, all further claims
to the proceeds of any such bond shall be barred.
(7) All sums which the commissioner may receive from the sale of personal property of
liquidated financial institutions where the final dividend has been paid and no disposition of said
property made by any order of the court, and the proceeds of sales of any personal property
used by the liquidation division which have been purchased with funds of financial institutions
in liquidation.
    Subd. 17. Disbursements from liquidation fund. The commissioner of commerce's
liquidation fund shall be used for the purpose of paying compensation and expenses as provided
in subdivision 7, for the payment of salaries of employees, regular and special, the compensation
of legal counsel, and all other expenses incurred by the commissioner in connection with the
administration of the Liquidation Division.
History: (7689) 1909 c 179 s 3; 1933 c 168 s 1; 1941 c 183 s 1; 1943 c 442 s 2; 1945 c
128 s 9,13; 1955 c 16 s 1; 1959 c 158 s 4; 1973 c 123 art 5 s 7; 1973 c 492 s 14; 1983 c 289
s 114 subd 1; 1984 c 655 art 1 s 92; 1986 c 444; 1Sp1986 c 3 art 1 s 82; 1987 c 349 art 1 s
25; 1990 c 464 s 1; 2003 c 112 art 2 s 7,8,50