§581. Capital notes or debentures

A. With the prior written approval of the commissioner, any trust company may at any time, through action of its board, and without requiring action of its shareholders or participants, issue and sell its capital notes or debentures, which shall be subordinate to the claims of depositories and may be subordinate to other claims, including the claims of other creditors or classes of creditors or the shareholders or participants. Capital notes or debentures may be convertible into shares or participation shares of any class or series. The issuance and sale of convertible capital notes or debentures are subject to satisfaction of preemptive rights, if any, to the extent provided by law.

B. The commissioner's prior approval shall be required to pay interest due or principal repayable on outstanding capital notes or debentures when the trust company is insolvent or operating in an unsafe and unsound condition, or if the proposed payment will cause the trust company to be in an unsafe and unsound condition or insolvent.

C. As provided by rule or regulation, the commissioner may establish limitations on the amount of outstanding capital notes and debentures that meet the requirements of this Section that may be included in equity capital as required by R.S. 6:574. The amount of any outstanding capital notes or debentures that meet the requirements of this Section and that are subordinated to unsecured creditors of the trust company may be included in equity capital of the trust company for purposes of determining hazardous condition or insolvency, and for such other purposes deemed appropriate by the commissioner.

Acts 2003, No. 573, §1, eff. June 27, 2003.