P.R. Laws tit. 7, § 819
(a) If as a result of an audit made of the Labor Bank, the Secretary of the Treasury obtains evidence that said Bank is not in a sound financial condition to continue its business or that it is being managed in such a way that its depositors run the risk of being defrauded, the Secretary of the Treasury shall assume the direction and management of the Bank and shall promptly appoint a receiver, which may be the Federal Deposit Insurance Corporation or any other natural or juridical person. The receiver thus appointed shall manage the Bank according to the provisions of this chapter and the regulations promulgated hereunder and under the supervision and the authority of the Secretary of the Treasury.
Said receivership shall terminate with the total liquidation of the Bank. The Secretary of the Treasury shall fix a reasonable compensation for the services of the receiver and his employees until a public corporation assumes the receivership of the Bank.
The determination of the Secretary of the Treasury to appoint a receiver shall be reviewed by the Court of First Instance, San Juan Part, by petition of the interested party, within a period of ten (10) days, counting from the date on which the determination is made. Said term shall be forfeitable. The determinations of facts made by the Secretary shall be sustained by the court unless they are clearly in error.
The receiver of the Bank shall take possession of all the assets, rights in law and equity, files, including the minute books, documents and records of any kind which belong to the Bank, wherever these are located; initiate the collection of all the Bank’s loans, charges and claims, as far as the available assets allow; shall pay all the Bank’s obligations and debts, as well as the necessary expenses of the receivership, and the capital shares, and make any other incidental disbursements related to the receiver’s liquidation functions. The paid-up value of the shares of those stockholders who are indebted to the Bank shall be used to expedite the payment of said debts. Likewise, the receiver may withhold the payment of any shares owned by any solitary guarantor of a debt, held by the Bank, until said debt is paid in full by the debtor. If the debtor defaults in the payment of said debt, the receiver may apply the amount retained from any of the Bank shares held by the solitary guarantor to the payment of the debt guaranteed by him. The Secretary of the Treasury may require the receiver to give the bond or guaranty he considers necessary.
The receiver, according to the terms and conditions he determines, may borrow any amount of money and may cede all or any part of the Bank’s assets to guarantee said loans, which may be subordinate to the rights of the depositors and other creditors of the Bank.
With respect to any type of personal or real property or fixture, and any kind of personal or real securities or shares that the Bank owns at the present time and acquires in the future, the receiver may purchase or acquire through any other instrument, sell, sell with option to repurchase, transfer, cede, exchange, pignorate, mortgage, encumber and cancel in whole or in part any type of encumbrances or burdens, segregate, group, administer, or lease for the amounts, terms, contracts and conditions that the receiver deems appropriate. The person who purchases any of the Bank’s assets from the receiver shall receive a fair title.
The receiver shall be empowered to receive any type of property as payment for debts, or receive the amount of any debt or loan in behalf of the Bank, and, in case said loans are guaranteed by a mortgage, to cancel the mortgages that encumber the debtor’s real or personal property, to which effect the receiver may grant satisfaction pieces and issue receipts, including those for the interest on the loans.
No agreement which tends to reduce or defeat the receiver’s rights, title or interest in any of the Bank’s assets shall be valid against the receiver, unless said agreement:
(1) Is in writing,
(2) has been granted by the Bank and the person or persons who claim an adverse interest therein, including the person who contracted the obligation simultaneously with the acquisition of the asset by the Bank,
(3) has been approved by the Board of Directors of the Bank, and said approval shall appear in the Board’s minutes, and
(4) that said agreement, since its approval, has been continuously considered as an official document of the Bank.
The receiver shall be subrogated in the claims made against the Bank that are paid by him. No later than sixty (60) days after the receiver has been appointed, he shall publish a weekly notice in at least two (2) newspapers of general circulation in Puerto Rico, for eight (8) consecutive weeks, to require any person who has a claim against the Bank to submit it and provide the corresponding evidence. The submission of a claim to the receiver must be made within a maximum term of one hundred and eighty (180) days, from the date of his appointment as such. No claim filed against the receiver shall be in order unless a claim has been submitted pursuant to the above provisions and it has been rejected by him.
The receiver shall be empowered to sue and be sued, to represent the Bank on all kinds of boards and before all the courts of the Commonwealth of Puerto Rico and the United States of America and its agencies, bureaus and instrumentalities, to which effect he may file any type of judicial or administrative actions, and prosecute them until the final sentence or resolution, or dismiss or settle them. He may also contract lawyers and experts with regard to said actions to defend the Bank in those lawsuits entered against it. In those cases in which the receiver or the Bank which is being liquidated is the defendant party, the jurisdiction of those cases shall rest on the Court of First Instance of Puerto Rico, San Juan Part. No writ of execution or of attachment nor any other remedy provided by law or regulations shall be issued against the receiver or any of the Bank’s assets until the final and definite judgment in any claim, action or proceeding of which the receiver or the Bank is a party thereof has been obtained.
Within the term of one hundred eighty (180) days counting from his appointment as receiver, and at his option, he may deem any executory contract which the Bank in liquidation is a party thereto, or any liability of the Bank as leaseholder, as terminated. The receiver’s decision to terminate any executory or lease contract shall not bring about a claim for damages, or for any other grounds or reasons other than rents due on the date of said termination.
The receiver shall retain the payment of any account to provide for the payment of any debt that the owner or co-owner of said account has with the Bank, regardless of the fact that the said debt is or is not of immediate maturity and payment. Sections 3221—3228 of Title 31 shall not be applicable to the above-stated cases. The receiver will not be asked to acknowledge as owner or co-owner of an account any person whose name does not appear in the Bank’s official documents as an owner or co-owner thereof.
The receiver shall be empowered to grant, amend, clarify or set aside any kind of private or public documents, whether they may be registered or not in the Property Registry, under the powers that have been conferred upon the receiver through this section.
The receiver may take whatever steps are necessary or convenient to proceed according to what is authorized in this section the effect indicated, and any others not foreseen which are needed in the process of liquidating the Bank.
The receiver shall account for the funds or the interest accrued thereon that have been borrowed by the Secretary of the Treasury and that have been advanced by him to the receiver.
The provisions contained in §§ 3077—3092 of Title 32 shall be applicable to the receiver.
Section 1 of Act No. 318 of May 13, 1949 and § 825 of this title shall not be applicable to the receiver.
The receiver may appoint and contract the services of those agents, employees and officials needed for the purposes of this section and shall indicate the duties that are required to carry out their functions, as well as delegating to them whatever power and duties provided in this section he deems necessary, and require them to present whatever bond or guaranty he determines.
(b) The receiver is hereby empowered to transfer all the Bank’s assets to any person or juridical entity created by the Legislature of Puerto Rico to act as receiver of the Bank’s assets.
(c) It shall be unlawful for any employer or official thereof, who has withheld amounts from wages or salaries on account of or in benefit of the Bank, not to send said sums of money or account to the receiver for the total amount of money thus withheld within the terms provided by law. Noncompliance with this provision shall constitute a misdemeanor and, if convicted, shall be punished by a fine not greater than five hundred dollars ($500) or imprisonment for a period not greater than six (6) months, or both penalties in the discretion of the court, for each violation. Any actions for or against the receiver, or in which the receiver is a part, shall be filed at the Court of First Instance of Puerto Rico, San Juan Part.
History —June 14, 1960, No. 86, p. 162, § 19; May 5, 1977, No. 14, p. 25, § 2; Mar. 16, 1979, No. 25, p. 54, retroactive to Feb. 21, 1979.