(a)Powers of Commissioner. In liquidating an association, the commissioner may exercise any power of the association, but shall not, without the approval of the court in which notice of possession has been filed:

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Terms Used In Tennessee Code 45-3-1203

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Association: means a capital stock or mutual savings and loan association. See Tennessee Code 45-3-104
  • Branch office: means an office or facility, other than the home office, at which payments on accounts and loans may be accepted and applications for loans may be received, at which accounts may be opened, and loans may be closed, and at which any other authorized business of the association may be transacted. See Tennessee Code 45-3-104
  • Commissioner: means the commissioner of financial institutions. See Tennessee Code 45-3-104
  • Contract: A legal written agreement that becomes binding when signed.
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Department: means the department of financial institutions. See Tennessee Code 45-1-103
  • Deposit: means a deposit of money, bonds or other things of value, creating a debtor-creditor relationship. See Tennessee Code 45-1-103
  • Depositor: means the holder of a deposit account in an association. See Tennessee Code 45-3-104
  • Home: means a structure designed for residential use by not more than four (4) families or a single condominium unit, including common elements pertinent thereto, designed for residential use by one (1) family in a multiple dwelling unit structure or complex, and includes fixtures. See Tennessee Code 45-3-104
  • Interest: means that part of the net income, retained earnings, or surplus of an association that is payable to or credited to holders of deposit accounts. See Tennessee Code 45-3-104
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Member: means a person holding a deposit account of a mutual association. See Tennessee Code 45-3-104
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means an individual, firm, partnership, joint venture, trust, estate, unincorporated association, company, or corporation organized under the laws of this or any other state, the United States or foreign country. See Tennessee Code 45-3-104
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Stockholder: means the holder of one (1) or more shares of any class of capital stock of a capital stock association organized and operating pursuant to this chapter. See Tennessee Code 45-3-104
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) Sell any asset of the association having a value in excess of five hundred dollars ($500);
(2) Compromise or release any claim if the amount of the claim exceeds five hundred dollars ($500), exclusive of interest; or
(3) Make any payment on any claim, other than a claim upon an obligation incurred by the commissioner, before preparing and filing a schedule of the commissioner’s determination.
(b)Termination of Contracts. Within six (6) months after the commencement of liquidation, and thereafter during the course of liquidation, the commissioner may by the commissioner’s election terminate any executory contract under which the association has contracted either to receive or to provide services, or any obligation of the association as a lessee. A lessor shall receive sixty (60) days’ notice of the commissioner’s election to terminate the lease, and the lessor shall have no claim for rent or other damages due to the termination other than rent accrued to the date of termination.
(c)Notice of Liquidation. As soon after the commencement of liquidation as practicable, the commissioner shall send notice of the liquidation to each known depositor, other creditor, and lessee of a safe deposit box or bailor of property held by the association at the address shown on the books of the association. The notice shall also be published in a newspaper of general circulation in each county in which the home office or any branch office is located once a week for three (3) successive weeks. The commissioner shall send with the notice a statement of the amount shown on the books of the association to be the claim of the depositor or other creditor. The notice shall demand that property held by the association as bailee or in a safe deposit box be withdrawn by the person entitled thereto and that claims of depositors and other creditors, if the amount claimed differs from that stated in the notice to be due, or if any claim has not otherwise been recognized in whole or in part by the association, be filed with the commissioner before a specified date not earlier than sixty (60) days thereafter in accordance with the procedures prescribed in the notice.
(d)Safe Deposit Boxes. Safe deposit boxes, the contents of which have not been removed before the date specified, shall be opened by the commissioner and the sealed packages containing the contents and the certificates, together with any unclaimed property held by the association as bailee and certified inventories thereof shall be reported to the state treasurer who shall deal with them in accordance with the Uniform Unclaimed Property Act, compiled in title 66, chapter 29, part 1.
(e)Claims of Depositors, etc. Within six (6) months after the last day specified in the notice for the filing of claims or a longer period that may be allowed by the court in which notice of possession has been filed, the commissioner shall:

(1) Reject any claim if the commissioner doubts the validity of the claim;
(2) Determine the amount, if any, owing to each depositor or other known creditor and the priority of the depositor’s or creditor’s claim;
(3) Prepare a schedule of the commissioner’s determinations for filing in the court in which notice of possession was filed; and
(4) Send written notice by certified mail to each person whose claim has not been allowed in full of the time when and the place where the schedule of determinations will be available for inspection and the date, not sooner than thirty (30) days thereafter, when the commissioner will file the commissioner’s schedule in the court in which notice of possession was filed.
(f)Objections to Commissioner’s Determinations. Within twenty (20) days after the filing of the commissioner’s schedule, any depositor, other creditor, or stockholder or member may file an objection to any determination made. Any objections so filed shall be heard and determined by the court, upon such notice to the commissioner and interested claimants as the court may prescribe. If the objection is sustained, the court shall direct an appropriate modification of the schedule. After filing the schedule, the commissioner may, from time to time, make partial distribution to the holders of claims that are undisputed or have been allowed by the court, if a proper reserve is established for the payment of disputed claims. As soon as is practicable after the determination of all objections, the commissioner shall make final distribution.
(g)Priorities.

(1) The following claims shall have priority:

(A) Administrative expenses;
(B) Obligations incurred by the commissioner while in possession of an association;
(C) Wages and salaries of officers and employees earned during the three-month period preceding the commissioner’s possession in an amount not exceeding six hundred dollars ($600) for any one (1) person;
(D) Fees and assessments due to the department; and
(E) Deposit accounts to the extent of two hundred dollars ($200) for each depositor.
(2) After the payment of all other claims with interest at the maximum rate permitted on the deposits, the commissioner shall pay claims otherwise proper that were not filed within the time prescribed. If the sum available for any class is insufficient to provide payment in full, the sum shall be distributed to the claimants in the class pro rata.
(h)Distribution of Excess. Any assets remaining after all claims have been paid shall be distributed to the stockholders or members in accordance with their respective interests.
(i)Unclaimed Funds. Unclaimed funds remaining after completion of the liquidation shall be treated as property held in the course of dissolution and reported to the state treasurer in accordance with title 66, chapter 29, part 1.
(j)Final Account. When the assets have been distributed in accordance with this section, the commissioner shall file an account with the court. Upon approval thereof, the commissioner shall be relieved of liability in connection with the liquidation and the certificate of authority and the charter shall be cancelled.
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