§ 17501. Acquisition of assets

(a) General. A Vermont financial institution may acquire the assets of, or assume the liabilities of, any other financial institution authorized to do business in this State. When the value of an acquisition or assumption is worth 25 percent or more of the assets of the acquiring, assuming, or transferring entity, the transaction shall be subject to and in accordance with the procedures, and subject to the conditions and limitations, set forth in this subchapter.

(b) Adoption of plan. The governing body of the acquiring or assuming institution and the governing body of the transferring institution shall adopt by majority vote a plan for acquisition, assumption, or sale on terms that are mutually agreed upon. The plan shall include:

(1) the names and types of the institutions involved;

(2) a statement setting forth the material terms of the proposed acquisition, assumption, or sale, including, if applicable, the plan for disposition of all assets and liabilities not subject to the plan;

(3) a statement that the entire transaction is subject to written approval of the Commissioner and, if the transaction involves all or substantially all of the assets or liabilities of the transferring institution, the approval of the transferring institution's investors or mutual voters;

(4) if an investor-owned institution is the transferring institution and the proposed sale is not for cash, a clear and concise statement that investors of the institution voting against the proposed sale are entitled to rights set forth in subdivision 17101(c)(2) of this title; and

(5) the proposed effective date of the acquisition, assumption, or sale and all other information and provisions that are necessary to execute the transaction or that are required by the Commissioner.

(c) Commissioner's approval. The Commissioner shall approve the plan of merger or consolidation in accordance with subsection 17101(b) of this title.

(d) Vote of investors or mutual voters. If the transaction involves all or substantially all of the assets or liabilities of the transferring institution or if the transferring institution's organizational documents require, the plan of acquisition, assumption, or sale shall be presented to the investors or mutual voters of the transferring institution for their approval, and their approval shall be obtained in accordance with subsection 17101(c) of this title. If the approval of investors is required, then investors dissenting to the transaction have the rights set forth in subdivision 17101(c)(2) of this title.

(e) Executed plan; certificate; effective date.

(1) If the plan is approved by the investors or mutual voters of the transferring institution, an executive officer and the secretary of such institution shall submit the executed plan to the Commissioner, together with a copy of the resolution of the investors or mutual voters approving it, each certified by these officers.

(2) Upon receipt of the items set forth in subdivision (1) of this subsection and evidence that the participating institutions have complied with all applicable federal law and regulations, the Commissioner shall certify, in writing, to the participants that the plan has been approved and is in compliance with the provisions of this title.

(3) Notwithstanding approval of the investors or mutual voters or certification by the Commissioner, the transferring institution's governing body may, in its discretion, abandon such a transaction without further action or approval by the investors or mutual voters, subject to the rights of third parties under any contracts relating to the transaction.

(f) National financial institution as participant. If one of the participants in a transaction under this section is a national financial institution, all participants shall comply with such requirements as may be imposed by federal law for such an acquisition, assumption, or sale and provide evidence of such compliance to the Commissioner; provided that if the purchasing or assuming institution is a national financial institution, approval by the Commissioner is not required.

(g) Investor-owned institution acquiring mutual or cooperative financial institution. A mutual or cooperative financial institution may not sell all or substantially all of its assets to an investor-owned institution without prior approval by the Commissioner of a plan that provides fair and equitable treatment of the depositors or members in the sale of the assets and distribution of the proceeds.

(h) Applicability to transactions in ordinary course of business. This subchapter does not apply to a transfer of assets of a financial institution in the ordinary course of business that does not include any assumption of deposit liabilities.

(i) Authority for expedited acquisitions. Notwithstanding any other provision of law, or any organizational document of any participating institution, the Commissioner may order that the acquisition of assets and assumption of liabilities become effective immediately if the Commissioner determines that the action is necessary for the protection of depositors or the public. This action may be taken upon receipt of the following:

(1) certified copies of the authorizing resolutions adopted by the respective governing bodies of the acquiring or assuming financial institution or financial institution holding company, and a copy of the plan of acquisition of assets and assumption of liabilities approved by a majority vote of the governing bodies of the acquiring or assuming financial institution or financial institution holding company and the transferring institution; or

(2) notice, containing information required by the Commissioner, from any other person of intent to acquire the assets and assume the liabilities of a financial institution or financial institution holding company.

(j) The applicant in any acquisition application filed with another supervisory agency by a financial institution holding company that controls a Vermont financial institution, or by a person that intends to acquire a Vermont financial institution or financial institution holding company shall file a copy of the application with the Commissioner at the time the application is filed with the other supervisory agency. The applicant shall notify the Commissioner of any amendments to the application by filing with the Commissioner a copy of any amendments that are required to be filed with the other supervisory agency. A copy of any acquisition approval issued by the other supervisory agency shall be filed with the Commissioner by the applicant within 30 days of its issuance. The Commissioner shall not disclose any information obtained pursuant to this section which is treated as confidential by the other supervisory agency. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)