La. Admin. Code tit. 10 § VII-505

Current through Register Vol. 50, No. 11, November 20, 2024

Section VII-505 - Procedural Requirements for Reorganizations

A. Approvals Required. Prior to reorganizing into a mutual holding company, a savings bank shall do all of the following:

1. obtain approval of a reorganization plan by a majority of the board of directors of the reorganizing savings bank and any acquires savings bank;

2. file the reorganization plan with the commissioner;

3. obtain the approval of the reorganization plan and any proxy statement by the commissioner and, if applicable, the Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve Board ("FRB"), and/or the Office of Thrift Supervision ("OTS");

4. obtain approval of the reorganization plan at a meeting of members held in accordance with the institution's articles and bylaws:

a. if the reorganization is a wholly internal reorganization and there is neither a merger nor a sale of all or substantially all of its assets to another financial institution, then an affirmative vote of a majority of the total number of votes which all members of the reorganizing savings bank and any acquires savings banks are entitled to cast is required; or

b. if the reorganization is not wholly internal or involves a merger, a two-thirds vote of such members is required.

Note: Meeting notice requirements shall comply with §329. C of the conversion rule.

B. Public Notice

1. Upon the commissioner's determination that an application for conversion is properly executed and is materially complete, the applicant shall be advised in writing, to promptly publish a notice of the filing of the application. After receipt of the advice, the applicant shall prominently post the notice in each of its offices and publish the notice in a newspaper having general circulation in each community in which any office of the applicant is located, as follows:

NOTICE OF FILING OF AN APPLICATION

FOR REORGANIZATION AS A

SAVINGS BANK MUTUAL HOLDING COMPANY

NOTICE IS HEREBY GIVEN that __________________ (name of applicant), located in ________________________________, has filed an application with the Commissioner of the Office of Financial Institutions for the State of Louisiana for approval to reorganize as a savings bank mutual holding company.

The original copy of the application is on file with the Commissioner of the Office of Financial Institutions, 8401 United Plaza Boulevard, Suite 200, Baton Rouge, Louisiana, 70809, and is available for public inspection or copying. A copy of the plan may also be inspected at any office of the applicant. Written comments including objections to the reorganization plan, and materials supporting the objections from any member of the applicant or any aggrieved person will be considered by the commissioner if postmarked within 20 calendar days after the publication of this notice. The commissioner may, in his discretion, and upon written request, extend the 20 day comment period for an additional calendar days. Failure to timely file written comments may preclude the pursuit of any remedies.

2. If any reorganization notice includes an acquires savings bank, the publication requirements of this Section shall be fulfilled both by the reorganizing savings bank and by the acquires savings bank, and the first paragraph of the form of notice in Paragraph 2 shall be replaced by the following paragraph:

NOTICE IS HEREBY GIVEN that _______________ (name of applicant), located in ______________________, and _____________________________ (name of applicant), located in _________________________________, have filed applications with the Commissioner of the Office of Financial Institutions for the State of Louisiana for approval to join together to reorganize as a mutual holding company.

3. After publication of the notice, the applicant(s) shall promptly file with the commissioner a copy of the published notice and a publisher's affidavit of publication from each newspaper in which the notice was published.

C. Proxy Procedural Requirements

1. The provisions of §305. A 26 and 327 of the conversion rule shall apply to all solicitations of proxies by any person in connection with any membership vote required under this rule, to the extent applicable. Proxy materials shall be approved by the commissioner, and contain information relevant to the action that members are being asked to approve. The term conversion as it appears in the conversion rule shall be deemed to refer to the reorganization or the stock issuance plan, as appropriate.

2. In addition to all disclosure requirements of Paragraph C.1 of this Section and of §515, all proxies requesting account holder approval of a mutual holding company reorganization shall address whether the mutual holding company intends to waive dividends, the implications to account holders, and the reasons such waivers are consistent with the fiduciary duties of the directors of the mutual holding company.

3. Savings banks proposing nonconforming minority stock issuances pursuant to §513. D.2 of this rule must include in the proxy materials to account holders seeking approval of a proposed reorganization an additional disclosure statement that serves as a cover sheet that clearly addresses:

a. the consequences to account holders of voting to approve a reorganization in which their subscription rights are prioritized differently and potentially eliminated; and

b. any intent by the mutual holding company to waive dividends, and the implications to account holders.

D. Actions by Commissioner. A proposed reorganization shall be acted on by the commissioner within 60 days after an application is filed and deemed completed, unless extended an additional 30 days by written notice, and, if approved, it shall be subject to the following conditions.

1. The reorganization shall be consummated not more than 12 months from the date the savings bank's members approve the reorganization plan. This time period may be extended up to an additional 12 months with the prior written approval of the commissioner. Further extensions may be granted for good cause shown.

2. The capitalization of the mutual holding company shall not cause the resulting savings bank to fail to meet its capital maintenance requirements under R.S. 6:1201 and 1206.

3. Any other conditions may be imposed which the commissioner finds necessary.

La. Admin. Code tit. 10, § VII-505

Promulgated by the Department of Economic Development, Office of Financial Institutions, LR 21:1071 (October 1995).

AUTHORITY NOTE: Promulgated in accordance with R.S. 6:1141.