P.R. Laws tit. 7, § 1334r
(a) The Corporation may issue a provisional order to place an insured cooperative under its administration when, after an audit, investigation, examination, or inspection it shows, in the judgment of the Corporation that the cooperative faces one or more of the following conditions:
(1) It lacks a solid financial and economic state.
(2) It has no effective internal controls for the administration of its affairs.
(3) It has no adequate reserves.
(4) Its accounting is not up to date, nor in a reasonably correct [form] to continue its operations.
(5) It is being administered in such way that the partners, persons or entities with deposits in it, are in danger of being defrauded.
It shall not be necessary to hold a hearing before issuing an order, when in the judgment of the Corporation, the cooperative is undergoing an emergency situation, in which case the Corporation shall take possession and immediate control of the Administration of the Cooperative according to the regulations adopted thereby.
In these cases, an administrative hearing shall be held within ten (10) days following the date of notice of the order, to determine if the same shall be permanent or revoked. In situations where no emergency exists, the hearing shall be held prior to issuing the order. In either case, the administrative hearing shall be held pursuant to the provisions of the Uniform Administrative Procedure Act, §§ 2101 et seq. of Title 3.
After the mergers, consolidation, or the sale of assets and liabilities of an insured cooperative occurs, and that the Corporation has met the compulsory services, the insured accounts of the partners and depositors of the acquired cooperative shall become shares and deposits in the acquiring institution.
(b) Notwithstanding the above, in the judgment of the Corporation, it may issue an order for the cooperative to show cause whereby the liquidation, mergers, consolidation, or sale of assets. and liabilities of any insured cooperative shall not proceed, whenever the following circumstances coincide:
(1) There is an emergency requiring immediate action with regard to such insured cooperative.
(2) There is no other reasonable option that can assure the solvency of the insured cooperative.
(3) It is determined that the merger, consolidation or purchase is the less costly option for the Corporation.
It shall not be necessary to hold a hearing prior to issuing an order, when in the judgment of the Corporation, the cooperative has an emergency situation, in which case, the Corporation shall take possession and immediate control of the Administration of the cooperative pursuant to the regulations adopted for this purpose by it.
In these cases, an administrative hearing shall be held within ten (10) days following the date of notice of the order to determine if the same shall be permanent or revoked. In situations where no emergency exists, the hearing shall be held prior to issuing the order. In any of the cases, the administrative hearing shall be held pursuant to the provisions of the Uniform Administrative Procedure Act, §§ 2101 et seq. of Title 3.
Any transaction for the mergers, consolidation, or sale of assets and/or liabilities to liquidate and/or dissolve an insured cooperative shall be made with cooperative institutions. However, the Corporation may perform said transactions with institutions that are not cooperatives when the cooperatives are not interested in performing the transaction. It is further provided, that no government entity of the Commonwealth of Puerto Rico shall issue orders or administrative actions decreeing the administration, trusteeship, merging, consolidation, purchase of assets and liabilities, or liquidation of any insured cooperative unless said action has the approval and ratification of the Corporation.
History —Aug. 17, 2001, No. 114, § 20; Aug. 10, 2002, No. 163, § 6.