History: P.A. 94-122 effective January 1, 1995; P.A. 02-73 amended Subsecs. (a) and (b) by adding provisions making
section applicable to Connecticut credit unions; P.A. 04-136 replaced former Subsecs. (a) and (b) with new Subsec. (a) re
appointment of a receiver or conservator for any Connecticut bank or Connecticut credit union and requirements re such
appointment, new Subsec. (b) authorizing commissioner to organize separate division within department for liquidating
or administering affairs of banks or credit unions for which commissioner is acting as receiver or conservator, re appointment
and powers of agent, and concerning reports, new Subsec. (c) requiring salaries and expenses incurred in liquidation,
reorganization or administration of bank or credit union to be paid out of funds of bank or credit union, subject to court
approval, and re reimbursement of state for any costs or expenses incurred by department concerning receivership or
conservatorship, new Subsec. (d) requiring possession of and title to all assets, business and property of bank or credit
union to pass to and vest in receiver without execution of any instruments upon appointment of a receiver, new Subsec.
(e) re exclusive jurisdiction of Superior Court and admissibility of records, and new Subsec. (f) re judgments or orders of
court, effective May 12, 2004; P.A. 05-288 made technical changes in Subsec. (c)(2), effective July 13, 2005.
Sec. 36a-226. (Formerly Sec. 36-39). Duties of receiver re inventory and appraisal of assets of Connecticut banks and credit unions in receivership. Conversion
of assets. Deposit of money. The receiver shall, as soon after the receiver's appointment
as is practicable, make and return to the court an inventory and appraisal of the assets
of the Connecticut bank or Connecticut credit union or estate in receivership, verified
by oath according to the receiver's best knowledge, information and belief, and shall,
from time to time thereafter, make and return such additional or supplementary inventories and valuations, and render such reports of the receiver's actions and statements of
accounts, as are necessary for the information of the court or as are required by the
order of the court. The receiver shall hold all the assets which come into the receiver's
possession as such receiver, subject to the order of the court, and shall convert such assets
into money with all reasonable dispatch. The receiver shall deposit money collected on
behalf of such bank or credit union in a bank, a Connecticut credit union, a federal credit
union, an out-of-state bank that maintains in this state a branch, as defined in section
36a-410, or an out-of-state credit union that maintains in this state a branch, as defined
in section 36a-435b. In cases of doubt or difficulty, the receiver may, upon written
application, ask the advice of the court as to the manner in which the receiver shall
execute the receiver's trust. The court may, from time to time, on its own motion, or
on complaint of any interested party, make all necessary and proper orders as to the
proceedings and actions of the receiver.
(1949 Rev., S. 5764; P.A. 94-122, S. 101, 340; P.A. 02-73, S. 16; P.A. 03-153, S. 2; P.A. 04-136, S. 18; P.A. 05-288,
S. 200.)
History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-39 transferred to Sec. 36a-226 in
1995; P.A. 02-73 added provisions making section applicable to Connecticut credit unions; P.A. 03-153 substituted "in
accordance with section 36a-223" for provisions re sale, disposition and conveyance of assets and compromising of claims,
effective June 26, 2003; P.A. 04-136 deleted "in accordance with section 36a-223" and required receiver to deposit money
collected on behalf of bank or credit union in a bank, Connecticut credit union, federal credit union, out-of-state bank that
maintains a branch in this state or out-of-state credit union that maintains a branch in this state, effective May 12, 2004;
P.A. 05-288 made technical changes, effective July 13, 2005.
Sec. 36a-237. (Formerly Sec. 36-51). Distribution of assets of any Connecticut
bank, trust bank or uninsured bank. Order of priority. Distribution of assets of a
Connecticut credit union in event of liquidation. Sequence of distribution. (a) The
assets of any Connecticut bank, other than a trust bank or uninsured bank, in the possession of a receiver shall be distributed in the following order of priority: (1) All fees and
assessments due the commissioner; (2) the charges and expenses of settling such bank's
affairs; (3) all deposits; (4) all other liabilities; (5) any liquidation account; and (6) in
the case of a capital stock Connecticut bank, the claims of shareholders or, in the case
of a mutual savings bank or mutual savings and loan association, the claims of depositors
in proportion to their respective deposits.
(b) (1) The assets of a trust bank or an uninsured bank shall be distributed in the
following order of priority: (A) All fees and assessments due the commissioner; (B)
administrative expenses; (C) approved claims of owners of secured trust funds on deposit
to the extent of the value of the security as provided in subsection (d) of section 36a-237f; (D) approved claims of secured creditors to the extent of the value of the security
as provided in subsection (d) of section 36a-237f; (E) approved claims by beneficiaries
of insufficient commingled fiduciary money or missing fiduciary property and approved
claims of clients of the trust bank or uninsured bank; (F) other approved claims of
depositors and general creditors not falling within a higher priority under this subdivision, including unsecured claims for taxes and debts due the federal government or a
state or local government; (G) approved claims of a type described by subparagraphs
(A) to (F), inclusive, of this subdivision that were not filed within the period prescribed
by sections 36a-215 to 36a-239, inclusive; and (H) claims of capital note or debenture
holders or holders of similar obligations and proprietary claims of shareholders or other
owners according to the terms established by issue, class or series.
(2) As used in this subsection, "administrative expense" means (A) any expense
designated as an administrative expense by sections 36a-231 and 36a-237h; (B) any
charge or expense of settling the affairs of the bank, including court costs and expenses
of operation and liquidation of the bank's estate; (C) wages owed to an employee of the
bank for services rendered within three months before the date the bank was placed in
receivership and not exceeding two thousand dollars to each employee; (D) current
wages owed to an employee of the bank whose services are retained by the receiver for
services rendered after the date the bank is placed in receivership; and (E) an unpaid
expense of supervision or conservatorship of the bank before it was placed in receivership.
(c) In the event of liquidation of a Connecticut credit union, the assets of the Connecticut credit union or the proceeds from any disposition of the assets shall be applied
and distributed in the following sequence: (1) All fees and assessments due the commissioner; (2) claims of secured creditors up to the value of their collateral; (3) the costs
and expenses of liquidation; (4) the wages due the employees of the Connecticut credit
union; (5) the costs and expenses incurred by creditors in successfully opposing the
release of the Connecticut credit union from certain debts as allowed by the commissioner; (6) all taxes owed to the United States or any other governmental unit; (7) all
other debts owed to the United States or any other governmental unit; (8) claims of
general creditors and secured creditors to the extent that their claims exceed the value
of their collateral; (9) claims of members, to the extent of uninsured share accounts, and
the organization that insured the share accounts of the Connecticut credit union; (10)
in the event of liquidation of a Connecticut credit union that is a corporate Connecticut
credit union, as defined in section 36a-435b, membership capital, and then paid-in capital; and (11) in the event of liquidation of a Connecticut credit union that has received
a low-income designation from the National Credit Union Administration under 12 CFR
701.34, as from time to time amended, any outstanding secondary capital accounts.
(d) The holders of claims in any class set forth in this section shall not receive any
distribution until the holders of claims in all classes having a higher priority under this
section are paid in full. If the assets of any such Connecticut bank or Connecticut credit
union are insufficient to pay in full all of the claims in a particular class, the assets shall
be distributed to each claimant within such class on a pro rata basis.
(1949 Rev., S. 5776; P.A. 78-121, S. 34, 113; P.A. 88-65, S. 29; P.A. 91-126, S. 1, 2; P.A. 92-89, S. 2, 20; P.A. 94-122, S. 112, 340; P.A. 02-73, S. 25; P.A. 04-136, S. 26; P.A. 05-288, S. 201.)
History: P.A. 78-121 removed building associations from Subsec. (3) and deleted Subsec. (5) re property of private
bankers; P.A. 88-65 deleted Subsec. (4) re property of industrial banks; P.A. 91-126 relettered Subsecs. (1), (2) and (3) to
read (a), (b) and (c), respectively, and renumbered the Subdivs. therein, changed "appropriated ratably to the payment of"
to read "distributed in the following order of priority" in each Subsec., changed state bank and trust company to capital
stock bank organized under the laws of this state and added Subdiv. (6) re claims of stockholders in Subsec. (a), changed
savings bank to mutual savings bank organized under the laws of this state and added "including deposits" and "in proportion
to their respective deposits" in Subsec. (b), changed savings and loan association to savings and loan association organized
under the laws of this state, except a capital stock savings and loan association and added "including deposits" in Subsec.
(c), and added Subsec. (d) re distribution to holders of claims; P.A. 92-89 provided that all fees and assessments due the
commissioner shall be first in order of priority in the event of distribution by a receiver; P.A. 94-122 consolidated the
priority provisions for payment of claims in case of bank failure for all banks, deleted Subsecs. (b) and (c) and renumbered
former Subsec. (d) as Subsec. (b), and made technical changes, effective January 1, 1995; Sec. 36-51 transferred to Sec.
36a-237 in 1995; P.A. 02-73 added new Subsec. (b) re application and sequence of distribution of assets of Connecticut
credit union in the event of liquidation, redesignated existing Subsec. (b) as Subsec. (c) and deleted "capital stock" and
"mutual savings bank or mutual savings and loan association" and added "Connecticut credit union" in Subsec. (c); P.A.
04-136 amended Subsec. (a) to replace "avails of the property" with "assets" and to insert "other than a trust bank or
uninsured bank", added new Subsec. (b) re distribution of assets of a trust bank or uninsured bank and definition of
"administrative expense", redesignated existing Subsecs. (b) and (c) as new Subsecs. (c) and (d), respectively, and amended
Subsec. (d) to substitute "assets" for "avails of the property" and "avails", effective May 12, 2004; P.A. 05-288 made a
technical change in Subsec. (c)(9), effective July 13, 2005.
Sec. 36a-237f. Procedures re filing claims against the estate of trust banks and
uninsured banks in receivership. Judgment. Appeal. Payment of claims. (a) To
receive payment of a claim against the estate of a trust bank or uninsured bank in receivership, a person who has a claim, other than a shareholder acting in that capacity, including
a claimant with a secured claim or a fiduciary claimant ordered by the receiver to file
a proof of claim under subdivision (2) of subsection (b) of section 36a-225, shall present
proof of the claim to the receiver at a place specified by the receiver, within the period
specified by the receiver. Receipt of the required proof of claim by the receiver is a
condition precedent to the payment of the claim. A claim that is not filed within the
period or at the place specified by the receiver may not participate in a distribution of
the assets by the receiver, except that, subject to court approval, the receiver may accept
a claim filed not later than the one-hundred-eightieth day after the date notice of the
claimant's right to file a proof of claim is mailed to the claimant, provided such claim
shall be subordinate to an approved claim of a general creditor. Interest does not accrue
on any claim after the date the bank is placed in receivership. The provisions of this
subsection shall not apply to a fiduciary claimant or depositor where the records of the
bank in receivership are sufficient to identify the fiduciary claimant's or depositor's
interest.
(b) (1) The proof of claim against a trust bank or an uninsured bank shall be in
writing, be signed by the claimant, and include: (A) A statement of the claim; (B) a
description of the consideration for the claim; (C) a statement of whether collateral is
held or a security interest is asserted against the claim and, if so, a description of the
collateral or security interest; (D) a statement of any right of priority of payment for the
claim or other specific right asserted by the claimant; (E) a statement of whether a
payment has been made on the claim and, if so, the amount and source of the payment,
to the extent known by the claimant; (F) a statement that the amount claimed is justly
owed by the bank to the claimant; and (G) any other matter that is required by the
Superior Court.
(2) The receiver may designate the form of the proof of claim. A proof of claim
shall be filed under oath unless the oath is waived by the receiver. If a claim is founded
on a written instrument, the original instrument, unless lost or destroyed, shall be filed
with the proof of claim. After the instrument is filed, the receiver may permit the claimant
to substitute a copy of the instrument until the final disposition of the claim. If the
instrument is lost or destroyed, a statement of that fact and of the circumstances of the
loss or destruction shall be filed under oath with the claim.
(c) A judgment against a trust bank or uninsured bank in receivership taken by
default or by collusion before the date the bank was placed in receivership may not be
considered as conclusive evidence of the liability of the bank to the judgment creditor
or of the amount of damages to which the judgment creditor is entitled. A judgment
against the bank entered after the date the bank was placed in receivership may not be
considered as evidence of liability or of the amount of damages.
(d) (1) The owner of secured trust funds on deposit may file a claim as a creditor
against a trust bank or uninsured bank in receivership. The value of the security shall
be determined under supervision of the Superior Court by converting the security into
money.
(2) The owner of a secured claim against a trust bank or uninsured bank in receivership may surrender the security and file a claim as a general creditor or apply the security
to the claim and discharge the claim.
(3) If the owner applies the security and discharges the claim under subdivision (2)
of this subsection, any deficiency shall be treated as a claim against the general assets
of the bank on the same basis as a claim of an unsecured creditor. The amount of the
deficiency shall be determined as provided by subsection (e) of this section, except that
if the amount of the deficiency has been adjudicated by a court in a proceeding in which
the receiver has had notice and an opportunity to be heard, the court's decision is conclusive as to the amount.
(4) The value of security held by a secured creditor shall be determined under supervision of the court by converting the security into money according to the terms of
the agreement under which the security was delivered to the creditor or by agreement,
arbitration, compromise or litigation between the creditor and the receiver.
(e) (1) A claim against a trust bank or uninsured bank in receivership based on an
unliquidated or undetermined demand shall be filed within the period for the filing of
the claim. The claim may not share in any distribution to claimants until the claim is
definitely liquidated, determined and allowed. After the claim is liquidated, determined
and allowed, the claim shares ratably with the claims of the same class in all subsequent
distributions.
(2) If the receiver in all other respects is in a position to close the receivership
proceeding, the proposed closing is sufficient grounds for the rejection of any remaining
claim based on an unliquidated or undetermined demand. The receiver shall notify the
claimant of the intention to close the proceeding. If the demand is not liquidated or
determined before the sixty-first day after the date of the notice, the receiver may reject
the claim.
(3) For the purposes of this subsection, a demand is considered unliquidated or
undetermined if the right of action on the demand accrued while the trust bank or uninsured bank was placed in receivership and the liability on the demand has not been
determined or the amount of the demand has not been liquidated.
(f) (1) Mutual credits and mutual debts shall be set off and only the balance allowed
or paid, except that a set-off may not be allowed in favor of a person if: (A) The obligation
of a trust bank or uninsured bank to the person on the date the bank was placed in
receivership did not entitle the person to share as a claimant in the assets of the bank;
(B) the obligation of the bank to the person was purchased by or transferred to the person
after the date the bank was placed in receivership or for the purpose of increasing set-off rights; or (C) the obligation of the person or the bank is as a trustee or fiduciary.
(2) Upon request, the receiver shall provide a person with an accounting statement
identifying each debt that is due and payable. A person who owes a trust bank or uninsured bank an amount that is due and payable against which the person asserts set-off
of mutual credits that may become due and payable from the bank in the future shall
promptly pay to the receiver the amount due and payable. The receiver shall promptly
refund, to the extent of the person's prior payment, mutual credits that become due and
payable to the person by the bank in receivership.
(g) (1) Not later than six months after the last day permitted for the filing of claims
or a later date allowed by the Superior Court, the receiver shall accept or reject in whole
or in part each claim filed against a trust bank or an uninsured bank in receivership,
except for an unliquidated or undetermined claim governed by subsection (e) of this
section. The receiver shall reject a claim if the receiver doubts its validity.
(2) The receiver shall mail written notice to each claimant, specifying the disposition
of the person's claim. If a claim is rejected in whole or in part, the receiver in the
notice shall specify the basis for rejection and advise the claimant of the procedures and
deadline for appeal.
(3) The receiver shall send each claimant a summary schedule of approved and
rejected claims by priority class and notify the claimant: (A) That a copy of a schedule
of claims disposition, including only the name of the claimant, the amount of the claim
allowed, and the amount of the claim rejected, is available upon request; and (B) of the
procedure and deadline for filing an objection to an approved claim.
(h) The receiver of a trust bank or uninsured bank, with the approval of the superior
court, shall set a deadline for an objection to an approved claim. On or before that date,
a depositor, creditor, other claimant or shareholder of a trust bank or uninsured bank
may file an objection to an approved claim. The objection shall be heard and determined
by the court. If the objection is sustained, the court shall direct an appropriate modification of the schedule of claims.
(i) The receiver's rejection of a claim may be appealed to the superior court in which
the receivership proceeding of a trust bank or uninsured bank is pending. The appeal
shall be filed within three months after the date of service of notice of the rejection. If
the appeal is timely filed, review is de novo as if it were an action originally filed in the
court, and is subject to the rules of procedure and appeal applicable to civil cases. An
action to appeal rejection of a claim by the receiver is separate from the receivership
proceeding, and may not be initiated by a claimant intervening in the receivership proceeding. If the action is not timely filed, the action of the receiver is final and not subject
to review.
(j) (1) The Banking Commissioner shall deposit all money available for the benefit
of persons who have not filed a claim and are, according to the bank's records, depositors
and creditors of a trust bank or uninsured bank in receivership in a bank, Connecticut
credit union, federal credit union, out-of-state bank that maintains in this state a branch,
as defined in section 36a-410, or out-of-state credit union that maintains in this state a
branch, as defined in section 36a-435b. The commissioner shall pay the nonclaiming
depositors and creditors on demand the undisputed amount, based on the bank's records,
held for their benefit.
(2) The receiver may periodically make a partial distribution to the holders of approved claims if: (A) All objections have been heard and decided as provided by subsection (h) of this section; (B) the time for filing appeals has expired as provided by subsection (i) of this section; (C) money has been made available to provide for the payment
of all nonclaiming depositors and creditors in accordance with subdivision (1) of this
subsection; and (D) a proper reserve is established for the pro rata payment of: (i) Rejected claims that have been appealed, and (ii) any claims based on unliquidated or
undetermined demands governed by subsection (e) of this section.
(3) As soon as practicable after all objections, appeals and claims based on previously unliquidated or undetermined demands governed by subsection (e) of this section have been determined and money has been made available to provide for the payment of all nonclaiming depositors and creditors in accordance with subdivision (1) of
this subsection, the receiver shall distribute the assets of a trust bank or uninsured bank
in satisfaction of approved claims other than claims asserted in a person's capacity as
a shareholder.
(P.A. 04-136, S. 30; P.A. 05-288, S. 202.)
History: P.A. 04-136 effective May 12, 2004; P.A. 05-288 made technical changes in Subsec. (j)(1), effective July
13, 2005.
Sec. 36a-237h. Inmunity for receivers and conservators of trust banks and
uninsured banks and their employees. (a) Persons entitled to protection under this
section shall be: (1) All receivers or conservators of trust banks or uninsured banks,
including present and former receivers and conservators; and (2) the employees of such
receivers or conservators. Attorneys, accountants, auditors and other professional persons or firms who are retained by the receiver or conservator as independent contractors,
and their employees, shall not be considered employees of the receiver or conservator
for purposes of this section.
(b) The receiver or conservator and the employees of the receiver or conservator
shall be immune from suit and liability, both personally and in their official capacities,
for any claim for damage to or loss of property, personal injury or other civil liability
caused by or resulting from any alleged act, error or omission of the receiver or conservator or any employee arising out of or by reason of their duties or employment, provided
nothing in this section shall be construed to hold the receiver or conservator or any
employee immune from suit or liability for any damage, loss, injury or liability caused
by the intentional or wilful and wanton misconduct of the receiver or conservator or
any employee.
(c) (1) If any legal action is commenced against the receiver or conservator or any
employee, whether personally or in such person's official capacity, alleging property
damage, property loss, personal injury or other civil liability caused by or resulting from
any alleged act, error or omission of the receiver or conservator or any employee arising
out of or by reason of their duties or employment, the receiver or conservator and any
employee shall be indemnified from the assets of the trust bank or uninsured bank for
all expenses, attorneys' fees, judgments, settlements, decrees or amounts due and owing
or paid in satisfaction of or incurred in the defense of such legal action unless it is
determined upon a final adjudication on the merits that the alleged act, error or omission
of the receiver or conservator or employee giving rise to the claim did not arise out of
or by reason of such person's duties or employment, or was caused by intentional or
wilful and wanton misconduct.
(2) Attorneys' fees and any related expenses incurred in defending a legal action
for which immunity or indemnity is available under this section shall be paid from the
assets of the trust bank or uninsured bank, as they are incurred, in advance of the final
disposition of such action upon receipt of an undertaking by or on behalf of the receiver
or conservator or employee to repay the attorneys' fees and expenses if it shall ultimately
be determined upon a final adjudication on the merits that the receiver or conservator
or employee is not entitled to immunity or indemnity under this section.
(3) Any indemnification for expense payments, judgments, settlements, decrees,
attorneys' fees, surety bond premiums or other amounts paid or to be paid from the
assets of the trust bank or uninsured bank pursuant to this section shall be an administrative expense of the receivership or conservatorship.
(4) In the event of any actual or threatened litigation against a receiver or conservator
or any employee for which immunity or indemnity may be available under this section,
a reasonable amount of funds, which in the judgment of the receiver or conservator may
be needed to provide immunity or indemnity, shall be segregated and reserved from the
assets of the trust bank or uninsured bank as security for the payment of indemnity until
such time as all applicable statutes of limitation shall have run and all actual or threatened
actions against the receiver or conservator or any employee have been completely and
finally resolved, and all obligations of the trust bank or uninsured bank and the commissioner under this section shall have been satisfied.
(5) In lieu of segregation and reserving of funds, the receiver or conservator may,
in the receiver's or conservator's discretion, obtain a surety bond or make other arrangements that will enable the receiver or conservator to fully secure the payment of all
obligations under this section.
(d) If any legal action against an employee for which indemnity may be available
under this section is settled prior to final adjudication on the merits, the receiver or
conservator shall pay from the assets of the bank the settlement amount on behalf of
the employee or indemnify the employee for the settlement amount unless the receiver
or conservator determines:
(1) That the claim did not arise out of or by reason of the employee's duties or
employment; or
(2) That the claim was caused by the intentional or wilful and wanton misconduct
of the employee.
(e) In any legal action in which the receiver or conservator is a defendant, that
portion of any settlement relating to the alleged act, error or omission of the receiver
or conservator shall be subject to the approval of the superior court before which the
receivership proceeding or conservatorship is pending. The court shall not approve that
portion of the settlement if it determines:
(1) That the claim did not arise out of or by reason of the receiver's or conservator's
duties or employment; or
(2) That the claim was caused by the intentional or wilful and wanton misconduct
of the receiver or conservator.
(f) Nothing contained or implied in this section shall operate, or be construed or
applied to deprive the receiver or conservator or any employee of any immunity, indemnity, benefits of law, rights or any defense otherwise available.
(g) (1) The provisions of subsection (b) of this section shall apply to any suit based
in whole or in part on any alleged act, error or omission which takes place on or after
May 12, 2004.
(2) No legal action shall lie against the receiver or conservator or any employee
based in whole or in part on any alleged act, error or omission which took place prior
to May 12, 2004, unless suit is filed and valid service of process is obtained not later
than twelve months after May 12, 2004.
(3) Subsections (c) to (e), inclusive, of this section shall apply to any suit which is
pending on or filed after May 12, 2004, without regard to when the alleged act, error
or omission took place.
(P.A. 04-136, S. 32; P.A. 05-288, S. 203.)
History: P.A. 04-136 effective May 12, 2004; P.A. 05-288 made a technical change in Subsec. (a), effective July 13, 2005.