§938. Power of state or federal mutual association to convert to capital stock association; procedures; approval of department required; minutes of meeting; succession

A.(1) If two-thirds of the members of the board of directors determine, and the commissioner concurs, that a substantial business benefit to the association will or may result, and if federal law, regulations, or administrative rulings authorize state or federal or mutual associations to convert to capital stock associations, the voting members of a mutual association organized pursuant to this Chapter, or otherwise subject to the provisions of this Chapter, or a federal mutual association located in Louisiana may vote to convert the association into a capital stock association by adopting a plan of conversion which is approved by the commissioner. However, when a state chartered mutual association is nearing an impaired condition, as determined by the commissioner, the commissioner may approve a supervisory conversion from a mutual to a stock form of charter without approval of the voting members. In all other cases, the plan of conversion shall be approved at a meeting of voting members called to consider such action by a majority vote of the total number of votes eligible to be cast, voted in person or by eligible proxy, unless federal law or regulation permits a lesser percentage of votes for a federal mutual association to convert, in which case that percentage shall control.

(2) The commissioner shall have discretion to approve or disapprove the plan of conversion, but he shall not approve the plan unless he finds that the plan is fair and equitable to members of the association, that the interests of the savings account holders and the public are adequately protected, and that the plan conforms to Federal Deposit Insurance Corporation regulations.

(3) Notice of the meeting, giving the time, place, and purpose thereof, together with a proxy statement and proxy form approved by the commissioner covering all matters to be brought before the meeting, shall be mailed to the commissioner and to each voting member at his last address as shown on the books of the association at least thirty days before the date on which the meeting is to be held.

B. Copies of the minutes of each meeting of the members, verified by the affidavit of the secretary or assistant secretary of the association, shall be filed in the office of the commissioner and with the Federal Home Loan Bank Board within a reasonable time after the meeting. When so filed, the verified copies of the minutes are presumptive evidence of the holding of the meeting and of the action taken.

C. The directors of the association shall execute and file with the commissioner proposed articles of incorporation as provided for in R.S. 6:706, together with an application for conversion and a firm commitment for or evidence of insurance of deposits and other savings accounts of a withdrawable type. The articles shall contain a statement that the corporation resulted from the conversion of a state or federal mutual association to a capital stock association. Approval by the commissioner shall be affixed to the articles of incorporation. The copy of the articles of incorporation and the certificate of incorporation shall be returned to the association. The association shall cease to be a mutual association on the date and at the time specified in the approved articles of incorporation.

D.(1) Upon conversion of a mutual association, the legal existence of the mutual association shall not terminate, but the capital stock association shall be a continuation of the entity of the mutual association.

(2) All property of the mutual association, including but not necessarily restricted to its rights, title, and interest in all property of whatever kind, whether real, personal, or mixed, and including all obligations due the mutual association, security interests under mortgages, or other security devices in favor of the mutual association, things in action, demands, claims and rights of action, and every right, privilege, interest, and every asset of any value or benefit then existing or pertaining to it, or which would inure to it immediately, by act of law, and without any conveyance or transfer and without any further act or deed shall vest and remain in the capital stock association into which the mutual association has converted itself.

(3) All mortgages or other security instruments belonging to the mutual association shall retain the respective ranks as of the date of original recordation and no further recordation or inscription shall be necessary in order to preserve such rank in favor of the capital stock association. The capital stock association shall have, and enjoy the same, in its own right as fully as the same was possessed, held, and enjoyed by the mutual association.

(4) The capital stock association, upon the conversion taking effect, shall continue to have and succeed to all the rights, obligations, and relations of the mutual association. No pending actions and other judicial proceedings to which the mutual association is a party shall be abated or discontinued by reason of the conversion, but may be prosecuted to final judgment, order, or decree in the same manner as if the conversion had not been made, and the capital stock association resulting from the conversion may continue the actions in its corporate name as a mutual association. Any judgment, order, or decree may be rendered for or against it which might have been rendered for or against the mutual association theretofore involved in the proceedings.

Acts 1983, No. 675, §1; Acts 2003, No. 17, §1, eff. May 23, 2003; Acts 2003, No. 60, §1, eff. May 23, 2003.