2004 Minnesota Statutes

     49.04 Involuntary liquidation of financial institutions. 

    Subdivision 1.    Commissioner taking possession; grounds 
 for; rights of third parties.  When it shall appear to the 
 commissioner that any financial institution has violated its 
 charter, or any law of the state, or is conducting its business 
 in an unsafe or unauthorized manner, or that its capital is 
 impaired, or if it or any of its controlling officers shall 
 refuse to submit its books, papers, and concerns to the 
 inspection of the commissioner, or any duly authorized 
 assistant, or if any of its officers shall refuse to be examined 
 upon oath touching its concerns, or if it shall suspend payment 
 of its obligations, or furnish reason for the commissioner 
 concluding that it is in an unsound or unsafe condition to 
 transact the business for which it was organized, or that it is 
 unsafe and inexpedient for it to continue business, or if it 
 shall neglect or refuse to observe a proper order of the 
 commissioner, the commissioner may forthwith take possession of 
 its property and business including forfeiture of its 
 certificate of authorization and retain this possession until it 
 shall resume business or its affairs be finally liquidated, as 
 herein provided.  On taking possession of the property and 
 business of any such financial institution, the commissioner 
 shall forthwith give notice of that fact to any and all 
 financial institutions or other corporations, associations, 
 partnerships, and individuals holding, or in possession of, any 
 of its assets.  No financial institution or other corporation, 
 association, partnership, or individual knowing of such taking 
 possession by the commissioner, or notified, as aforesaid, shall 
 have a lien or charge for any payment, advance, or clearance 
 thereafter made, or liability thereafter incurred against any of 
 the assets of the financial institution of whose property and 
 business the commissioner shall have taken possession, as 
 aforesaid.  The financial institution may, with the consent of 
 the commissioner, resume business upon such conditions as may be 
 approved by the commissioner.  Upon taking possession of the 
 property and business of the financial institution, the 
 commissioner is authorized to collect money due to it and to do 
 such other acts as are necessary to conserve its assets and 
 business, and shall proceed to liquidate the affairs thereof, if 
 in the commissioner's opinion it cannot safely resume business, 
 as hereinafter provided.  

    Subd. 2.    Application to enjoin liquidation.  
 Whenever any such financial institution of whose property and 
 business the commissioner has taken possession as aforesaid 
 deems itself aggrieved thereby it may at any time within ten 
 days after such taking possession apply to the district court to 
 enjoin further proceedings, and said court, after citing the 
 commissioner to show cause why further proceedings should not be 
 enjoined, and hearing the allegations and proofs of the parties 
 in determining the facts, may upon the merits dismiss such 
 application or enjoin the commissioner from further proceedings 
 and direct the commissioner to surrender such business and 
 property to such financial institutions.  

    Subd. 3.    Actions stayed.  When the commissioner 
 shall take possession of the business and property of any 
 financial institution, any action at law pending against it 
 shall be stayed, upon motion to the court in which such action 
 is pending setting forth said fact, so long as such possession 
 continues, unless otherwise ordered by the court, pursuant to 
 the provisions of subdivision 5.  

    Subd. 4.    Garnishments, attachments, levies vacated.  
 All garnishments, attachments, and levies in any action against 
 the financial institution shall likewise be set aside and 
 vacated upon motion.  

    Subd. 5.    Judgments vacated.  Any judgment for money 
 only entered against such financial institution within 30 days 
 preceding the date when the commissioner takes possession shall 
 be vacated and set aside upon motion, and the judgment creditor 
 shall be entitled to file a claim with the commissioner; all 
 other judgments entered within that period of 30 days shall be 
 vacated upon the application of the commissioner to the court 
 wherein such judgment is entered, when it appears to the court 
 that the judgment is detrimental to the interest of the 
 creditors of the financial institution.  

    Subd. 6.    Subsequent levies and attachments unlawful.  
  It shall be unlawful for any officer or other person to levy 
 upon, seize, or attach any of the assets of any financial 
 institution to the possession of which the commissioner is 
 entitled, after the commissioner has taken possession, and so 
 long as this possession continues.  

    HIST: (7688, 7699-25, 7699-26, 7699-27, 7699-28) 1909 c 179 s 
 2; 1927 c 261 s 1-4; 1945 c 128 s 5; 1986 c 444; 1987 c 349 art 
 1 s 23