The Vermont Statutes Online

Title 8: Banking and Insurance

Chapter 208: Effect of Merger, Share Exchange, Consolidation, Conversion, or Acquisition; Nonconforming Activities

• Subchapter 001: EFFECT OF MERGER, SHARE EXCHANGE, CONSOLIDATION, CONVERSION, OR ACQUISITION

• § 18101. Effect of merger, share exchange, consolidation, conversion, or acquisition

  (a) Applicability. From and after the effective date of a merger, including a share exchange, consolidation, conversion, or acquisition, under chapter 205, 206, or 207 of this title, the resulting institution may conduct business in accordance with the terms of the plan as approved and in accordance with this chapter.

  (b) Continuing entity. Whenever the authority of any participating or converting institution has been terminated, the resulting institution shall be deemed to be a continuation of the entity of the participating or converting institution such that all property of the participating or converting institution, including rights, titles, and interests in and to all property of whatsoever kind, whether real, personal, or mixed, and things in action, and every right, privilege, interest, and asset of any conceivable value or benefit then existing, or pertaining to it, or that would inure to it, including appointments, designations, and nominations, and all other rights and interests as trustee, personal representative, guardian, and conservator, and in every other fiduciary capacity, shall immediately by act of law and without any conveyance or transfer and without further act or deed be vested in and continue to be that property of the resulting institution, and such institution shall have, hold, and enjoy the same in its own right as fully and to the same extent as the same was possessed, held, and enjoyed by the participating or converting institution and such resulting institution as of the time of the taking effect of such merger, consolidation, conversion, or acquisition shall continue to have and succeed to all the rights, obligations, and relations of the participating or converting institution.

  (c) Effect on judicial proceedings. All pending actions and other judicial proceedings to which the participating or converting institution is a party shall not be deemed to have been abated or to have been discontinued by reason of such merger, consolidation, conversion, or acquisition, but may be prosecuted to final judgment, order, or decree in the same manner as if such merger, consolidation, conversion, or acquisition had not been taken; and such institution resulting from such merger, consolidation, conversion, or acquisition may continue such action in its new name, and any judgment, order, or decree may be rendered for or against it that might have been rendered for or against the participating or converting institution involved in such judicial proceedings.

  (d) Creditor’s rights. The resulting institution in a merger, consolidation, conversion, or acquisition shall be liable for all obligations of the participating or converting institution that existed prior to such merger, consolidation, conversion, or acquisition, and the merger, consolidation, conversion, or acquisition taken shall not prejudice the right of a creditor of the participating or converting institution to have his or her debts paid out of the assets thereof, nor shall such creditor be deprived of, or prejudiced in, any action against the officers, directors, corporators, or members of a participating or converting institution for any neglect or misconduct.

  (e) Exception. In the event of an acquisition of assets pursuant to section 17501 of this title, the provisions of subsections (b), (c), and (d) of this section shall apply only to the assets acquired and the liabilities assumed by the resulting institution, provided that the transferring institution retains sufficient assets to satisfy all liabilities not assumed by the resulting institution.

  (f) Powers and attributes of resulting organization. Whenever financial institutions merge or consolidate, the resulting organization, except as provided in this subchapter, shall have, possess, and own, but separately and distinguishably as provided by this subchapter, all property, rights, powers, franchises, privileges, and appointments whether existing, contingent, or future, corporeal or incorporeal, tangible or intangible, of every nature whatsoever of each of the merging organizations. If any of the merging organizations are acting or have been acting or have been nominated, appointed, delegated, or designated by any court, person, or otherwise to act as trustee, attorney, agent, executor, administrator, receiver, assignee, guardian, or in any like capacity, the resulting organization shall have, possess, and be vested with and succeed to all of the property, rights, powers, privileges, duties, and obligations appertaining to each such fiduciary capacity, without further or additional appointment, obligation, or designation. The resulting financial institution shall be a continuation of the entity of each and all of the organizations so merged, each such entity, however, remaining separable and distinguishable to the extent provided in this subchapter. It may exercise the franchise of each of the organizations separably and distinguishably as well as the composite franchises of all. Except as provided in this subchapter, it shall hold, exercise, and perform all rights, powers, privileges, duties, and obligations appertaining to any and all trust, representative, or fiduciary relationships of each of the merged financial institutions, and shall be liable for all of the debts, contracts, and obligations of each of the merged financial institutions. Any such debt, undertaking, or obligations of any merged financial institution may be enforced against it as fully and effectively as it could have been against the merged financial institution.

  (g) Disposal of property and assets. The resulting financial institution shall have the right to use, control, sell, or dispose of all real and personal estate, rights, or interests of the merged financial institutions and convey the same by deed, assignment, endorsement, contract, or other conveyance, either in its own name or in the name of any merged financial institutions as provided in this section, or in the names of both, as fully and effectively as the merged financial institutions could have done; and may maintain suit in its own name or in the name of any such financial institution, as provided in this subchapter, or in the names of both, to foreclose or recover any title, right, demand, or claim appertaining to the merged financial institutions. To this end and except as provided in the contract of merger, the corporate existence of each of the merged financial institutions shall be deemed and treated as having continued each separably and distinguishably for all purposes necessary or convenient to liquidate the assets of any merged financial institutions. Any receipt; assignment; endorsement; transfer; option; contract to sell, convey, or exchange; compromise; acquittance; and release may be executed in its name or in the name of the resulting financial institutions, or both. Any other thing may be done in either or both of these names that may be necessary or proper for the reduction to cash of any assets of a foreclosure of any rights or titles or the doing of any other acts or things appropriate to the winding up of the affairs of the merging organization as a separate entity. Those contracts and agreements shall be executed and those acts shall be done under the control of the directors of the resulting organization. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2021, No. 105 (Adj. Sess.), § 304, eff. July 1, 2022.)

• Subchapter 002: NONCONFORMING ACTIVITIES; CESSATION

• § 18201. Nonconforming activities; cessation

  (a) Applicability. If, as a result of a merger, consolidation, conversion, or acquisition pursuant to this title, the resulting institution is to be of a different type or of a different character than any one or all of the participating or converting institutions, such resulting institution shall be subject to the conditions and limitations as set forth in this subchapter.

  (b) Plan for termination. The plan of merger, consolidation, conversion, or acquisition shall set forth the method and schedule for terminating those activities not permitted by the laws of this State for the resulting institution, but that were authorized for any of the participating or converting institutions.

  (c) Effective date. The plan of merger, consolidation, conversion, or acquisition shall state that from the effective date of such action, the resulting institution shall not engage in any nonconforming activities, except to the extent necessary to fulfill obligations existing prior to merger, consolidation, conversion, or acquisition, pursuant to subsection (d) of this section.

  (d) Compliance with limitations. If, as a result of such merger, consolidation, conversion, or acquisition, the resulting institution exceeds any lending, investment, or other limitations imposed by this title, it shall conform to such limitations within such period of time as shall be established by the Commissioner.

  (e) Divestiture. The Commissioner may, as a condition to such merger, consolidation, conversion, or acquisition, require a nonconforming activity to be divested in accordance with such additional requirements as he or she may deem appropriate under the circumstances. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)