Insolvent Banks

Miss. Code Ann. tit. 81, ch. 9
in effect

Miss. Code Ann. § 81-9-1 Capital stock impaired; how restored.

When it shall be brought to the attention of the state comptroller that the capital stock of any bank is impaired to such an extent as to render a further continuance of its business hazardous to its creditors, depositors, or the public, he shall immediately request the stockholders to pay into the bank a sufficient sum to restore the capital or to execute to him, for the use and benefit of all creditors whether then existing or thereafter created, a bond for such sum as may be required to fully restore the capital stock with good and sufficient sureties to be approved by him, conditioned that all just debts and liabilities, whensoever created, shall be paid in full. Such requests on the part of the state comptroller shall not be compulsory, and any stockholder may refuse to accede to such request. If the stockholders shall fail, within a time to be fixed by the state comptroller, to restore the capital stock or to give such bond, the state comptroller shall close such bank and submit the same to the proper chancery court for liquidation as provided in this chapter. However, when the state comptroller finds the capital stock of any bank to some extent impaired, but considers that a further continuance of its business will not be hazardous to its creditors, depositors, or the public, he may grant any such bank a reasonable time, to be determined by the state comptroller, to overcome or restore such impairment. If the impairment is not overcome or restored within the time allowed for this purpose, the state comptroller shall then proceed to deal with any such bank as provided for above. If stockholders owning one-third (1/3) or more of the total outstanding capital stock of said bank shall refuse to accede to the comptroller’s request, as above provided, for additional capital and if the cause of the comptroller’s request shall have been in part the result of bad management as evidenced by unsatisfactory loans or investments, then any three (3) or more minority stockholders, representing one-third (1/3) or more of the total outstanding capital and surplus, if any, may petition the state comptroller for liquidation of the bank and, if satisfactory action be not taken by the state comptroller within ten days, as set out in said petition of the minority stockholders, then the said minority stockholders, representing one-third or more of the outstanding capital stock, shall have the right to petition the appropriate chancery court for liquidation of the bank and such other relief as the court may render. In such cases, the examination reports of the department of bank supervision and proper federal supervisory agencies shall be prima facie evidence of the cause to be heard.

Miss. Code Ann. § 81-9-3 Transfers by banks and other acts in contemplation of insolvency.

All transfers of the notes, bonds, bills of exchange, or other evidences of debt owing to any bank, or of deposits to its credit; all assignments of mortgage, securities on real estate, or of judgments or decrees in its favor; all deposits of money, bullion, or other valuable thing for its use, or for the use of any of its shareholders or creditors; and all payments of money to either, made after the commission of an act of insolvency, or in contemplation thereof, with a view to prevent the application of a bank’s assets in the manner prescribed by this chapter, or with a view to the preference of one creditor to another, except state deposits, shall be utterly null and void.

Miss. Code Ann. § 81-9-5 Closing insolvent banks.

If at any time the state comptroller shall be of the opinion that a bank is insolvent, or that its condition is such that a further continuance of its business is hazardous to its creditors, depositors, or the public, or is unable to meet its obligations in the ordinary course of business, he shall close said bank and proceed as provided in this chapter.

Miss. Code Ann. § 81-9-7 Examiner to be placed in charge.

If the Commissioner of Banking and Consumer Finance shall close a bank as provided in this chapter and the assets thereof shall not be promptly sold as provided in Section 81-9-11, he shall immediately place in charge an examiner, whose salary and expenses, including auditing and clerical help, shall be paid out of the assets of the bank and not out of the Department of Banking and Consumer Finance Maintenance Fund.

Miss. Code Ann. § 81-9-9 Conservation of assets; title.

During the period in which such examiner shall be in charge he shall prepare and make a transcript of the books and affairs of the bank, and shall generally conserve the assets of the bank. During such period the legal title to the assets of the bank shall be in the state comptroller, which title shall be generally that of a temporary receiver. The examiner in charge shall be the custodian of the affairs and assets of the bank, for and in behalf of the state comptroller, and shall work under the direction of the state comptroller. The state comptroller shall forthwith file a petition in the chancery court of the county in which the bank is situated, in a cause to be entitled, “In the matter of the custody of (naming bank) by (name of state comptroller), state comptroller.” The bank shall be a party respondent to the petition, unless the board of directors, by resolution voted for by a majority thereof, shall have submitted the bank and its affairs to the custody of the state comptroller, and waived service of process on the petition, in which event the hearing on such petition may be ex parte. If no such resolution is passed the chancellor shall order a hearing on such petition at such time to be fixed by him, and shall order issuance of a summons for the bank, returnable at the time so fixed. At the hearing on the petition the chancellor shall confirm the acts of the state comptroller in taking charge of the bank unless good cause be shown for returning the bank to the management of the directors.

Miss. Code Ann. § 81-9-11 Sale of assets of insolvent bank.

After the state comptroller has taken charge of an insolvent bank as herein provided, he shall have power and authority, by and with the consent of the chancery court, or of the chancellor in vacation, to whose jurisdiction the affairs of the insolvent bank have been submitted, (and also of the Federal Deposit Insurance Corporation if the deposits of such bank be to any extent insured by said corporation) to sell the assets of such insolvent bank to any going bank at such price as may be deemed fair and reasonable value for such assets, allowing the purchasing bank to assume all or a certain percentage of the liabilities of the insolvent bank in payment for the assets so sold or taken over by the purchasing bank. Such sale when approved by the chancery court or chancellor shall have the effect of a quit claim of all the right, title and interest of the comptroller and of the insolvent bank in and to the property and assets so sold and transferred. In such cases the title to all assets other than real estate shall pass to the purchasing bank by delivery, and a conveyance of the real estate of the insolvent bank may be made by the comptroller in the form of a deed of conveyance which shall operate as a special warranty deed against the comptroller and the insolvent bank.

Miss. Code Ann. § 81-9-13 Reopening banks under “freezing of deposits” agreements.

The comptroller of banks of the State of Mississippi is authorized to reopen any closed bank, with the approval of the chancery court of the county in which the bank is situated, or of the chancellor thereof in vacation, when at least three-fourths of the general depositors and creditors therein holding unsecured deposits, or any number of the general depositors and creditors therein, provided they own at least three-fourths of the unsecured deposits in or claims against such bank, agree to the reopening thereof and sign what is commonly termed a “freezing-of-deposits” agreement, under which they agree to accept repayment of their deposits and claims in deferred installments, for the full amount thereof or in reduced amounts, with or without interest, the period over which the deposits and claims are to be repaid and the rate of payment, together with the interest rate, if any, to be determined by the comptroller of banks, if the comptroller is convinced that such bank as reopened will be in a solvent condition and can repay the depositors and creditors the amounts of their deposits and claims in accordance with the terms of the agreement for the repayment of same. Before any such bank shall be reopened, the entire plan for the reopening of the same, and all material facts in connection there with, shall be submitted by the comptroller to the chancery court of the county in which the bank is situated, or the chancellor in vacation, by proper petition, duly verified, such petition to contain a statement of the assets and liabilities of the bank and such other information as may be necessary to convey to the court or chancellor the true facts with reference to the condition of such bank, and a decree of the court or chancellor in vacation obtained approving the plan agreed upon and submitted by the comptroller for the reopening of such bank and authorizing the same to be reopened. The hearing of such petition shall be had at such time and place as shall be fixed by the court or chancellor, after ten days’ notice is given of such hearing by publication in some newspaper having a general circulation in the county in which the closed bank is located. The filing of a petition by any closed bank submitted to the jurisdiction of the chancery court of the county of its domicile and publishing of notice to creditors as otherwise provided by law shall vest in said court jurisdiction over all of the assets of said bank and of its creditors and empower it to so act hereunder. When any closed bank has been reopened as herein provided, the general depositors and creditors thereof who have not expressly agreed to accept repayment of their deposits and claims in accordance with the freezing-of-deposits plan shall be bound to accept repayment of their deposits and claims according to the terms of the decree of the court or chancellor in vacation and on the same basis and at the same rate as those general depositors and creditors who have signed the freezing-of-deposits agreement, except that this paragraph shall not apply to deposits of public moneys or to depositors and creditors holding preferred claims, or secured claims, nor to correspondent banks holding bills payable of the closed bank to the extent that same are adequately secured by the collateral held therefor. Proper provision shall be made in the plan for the reopening of such bank to pay public depositors, depositors, and creditors holding preferred and secured claims and correspondent banks holding bills payable to the extent which they are adequately secured by collateral held, on terms acceptable to them, but any arrangement so made shall not operate prejudicially to the rights of the general depositors and creditors of the bank. This section shall not be construed to give the comptroller the right to diminish the assets of a closed bank to the prejudice of the depositors and creditors thereof, and any assets that may be charged out as doubtful or as losses and not carried into the reopened bank as an asset, shall be held by the reopened bank in trust for payment pro rata of such parts of the claims of the depositors and creditors as under the decree authorizing the reopening of the bank are provided shall not be a charge against the assets of the reopened bank. The reopened bank shall be accountable to the said chancery court for the proper handling of such assets not taken into the reopened bank and the payment of the proceeds thereof to the creditors entitled thereto; but without restriction upon the public in dealing with the reopened bank relative thereto nor obligation upon the public so dealing to see that such bank properly accounts therefor. This section is to be liberally construed as an exercise of the police power of the state as a sovereign to legislate with reference to banks as public utilities to promote the public welfare, and shall apply to all closed banks whether heretofore, now or hereafter closed.

Miss. Code Ann. § 81-9-15 Limitation on custodial period; approval of acts involving discretion or judgment.

The period in which the state comptroller shall remain the custodian of banks closed as provided in Section 81-9-5 shall not exceed ninety days, and during such period all acts of the state comptroller involving discretion or judgment shall be approved by order of the chancellor, entered in the cause provided for in Section 81-9-9 in the same manner and to the same extent as if the state comptroller were a receiver.

Miss. Code Ann. § 81-9-17 Receiver to be appointed.

At the end of ninety days, if the state comptroller has not sold the assets of the bank as provided in Section 81-9-11 above, the state comptroller shall file a petition in the proper chancery court in a cause to be entitled “In the matter of the receivership of (name of bank).” Such petition shall recite the taking of the bank into custody under the provisions of this chapter, the failure to sell the assets as provided in Section 81-9-11 above, and shall pray for the appointment of a receiver. The chancellor shall enter an order upon such petition, appointing a receiver of his own selection who shall not have been an officer, director or employee of the bank for a period of five years prior to the closing thereof. However, upon petition signed by the owners and holders of a majority in amount of the deposit liability of the bank, the chancellor may appoint such an officer, director or employee as receiver.

Miss. Code Ann. § 81-9-19 Surrender of assets to receiver; reports.

The state comptroller shall forthwith surrender to the receiver possession of all the assets of the bank, including the books and records thereof, and shall render to the receiver a true accounting and report of all transactions concerning assets and liabilities of the bank during the period of the state comptroller’s custody thereof. Whereupon, future liability of the state comptroller with reference to said bank shall cease.

Miss. Code Ann. § 81-9-21 Bond of receiver.

The receiver shall furnish bond in such amount and with such sureties as may be fixed by the chancellor, payable to the State of Mississippi, and conditioned for the faithful performance of his duties as receiver of such bank. Such bond may, with consent of the chancellor, be put in action by anyone aggrieved by the receiver’s conduct of the affairs of the insolvent bank, and premiums on the bond shall be an expense of the liquidation.

Miss. Code Ann. § 81-9-23 Duties of receiver.

The receiver shall proceed promptly to wind up the affairs of the bank, and in all matters involving discretion or judgment shall obtain the approval of the chancellor in an order entered in the receivership cause which was opened by the state comptroller by the filing of the petition asking for the appointment of a receiver. By and with the consent of the chancellor the receiver may be made a party respondent to petitions filed in the receivership caused by persons seeking to have adjudicated rights in the assets and affairs of the bank, and which the receiver has refused to recognize. The receiver may sell all or any portion of the assets of the bank, real, personal, or mixed, for cash or upon other terms; may effect compromises, and bring about exchanges of property; all under the approval of the chancellor with a view to equity and approximate justice to all parties, and a prompt and efficient liquidation.

Miss. Code Ann. § 81-9-25 Receivers empowered to borrow money.

By and with the approval of the chancellor all receivers of insolvent banks in this state shall have power to borrow money, in the capacity of receivers, from any individual or corporation, including corporations or other agencies organized under the laws of the United States. For the security of such loans the receiver may pledge, mortgage and hypothecate any portion of or all of the assets, real, personal, or mixed, of such insolvent bank. Such loan may be extended, renewed, and rearranged from time to time, and shall be the direct obligation of the receivership, but the receiver shall not be personally liable for payment thereof. The lender shall not be charged with any duty or responsibility in regard to the application by the receiver of the proceeds of any such loan.

Miss. Code Ann. § 81-9-27 Receivers may sell assets of insolvent banks.

By and with the approval of the chancellor all receivers of insolvent banks in this state shall have power to sell, for cash or on terms, to any individual or corporation, including corporations or other agencies organized under the laws of the United States, any portion or all of the assets of such insolvent bank. Such conveyances shall have the effect of a quit claim of all the right, title and interest of the receiver, and the purchaser shall not be charged with any duty or responsibility in regard to the application by the receiver of the purchase money. By and with the approval of the chancellor and of the state comptroller, receivers of insolvent banks may sell any portion or all of the assets of such receivership to an active and operating bank the purchase price to be in cash or on terms, or otherwise; or, the purchasing bank may be allowed to assume a percentage of the liabilities of the insolvent bank, with optional privilege to the creditors to receive cash or other property in settlement of their claims. Under this section chancellors shall have broad powers and discretion to approve plans which are for the best interests of creditors of closed banks, taken as a whole.

Miss. Code Ann. § 81-9-29 Liquidation; separate assets for creditors; corporate stock.

Where a bank chartered under the laws of the State of Mississippi has failed, or may hereafter fail, and in the process of liquidation or after reorganization or reopening of such failed bank certain assets are placed in a separate fund for the benefit of creditors of such bank, it is found that said bank, or the owner of such trust assets, owns stock in, has a lien on, or is in any way interested in the stock of a corporation, organized and doing business under the laws of the State of Mississippi, and such bank, or owners of such trust assets, is unable to sell such stock at its reasonable fair value, and such stock is less than ten percent of the outstanding stock of said corporation, and the remainder of the stock of such corporation is owned by a small number of persons, then the chancery court of the county in which said bank is located is authorized and empowered in a suit brought for that purpose, to fix the value of said stock. In the event the holders of the majority of the stock will not pay the value as fixed by the court then the court shall order the assets of said corporation, or a sufficient amount thereof, to be sold to pay the value of said stock as fixed by the court, if the surplus undivided profits and other accumulations of said corporation are sufficient to take care of the value of said stock as fixed by the court without seriously interfering with the continued operation of said corporation.

Miss. Code Ann. § 81-9-31 Proof of claims.

The receiver appointed under Section 81-9-17 shall cause notice to be given in such newspaper as the court may direct, once a week for four consecutive weeks, calling on all persons who may have claims against the bank to present the same and make proof thereof upon forms to be furnished by the receiver, at a place and within a time specified in the notice, which shall be approximately ninety days from the date of the first publication. A copy of the notice shall be mailed to all depositors and creditors as shown by the books of the bank, at their last known post-office address. If the receiver doubts the justice or validity of any claim he shall reject the same by serving notice upon the claimant in writing, and such rejection shall be final unless the claimant shall, within ninety days from the date of such rejection, petition the chancellor in the receivership cause for a review of the action of the receiver. Claims presented more than ninety days after the first publication of the above recited notice shall be entitled to share only in dividends thereafter paid.

Miss. Code Ann. § 81-9-33 Inventory and books by the receiver.

The receiver shall make an inventory of all assets and liabilities of the bank which may have been turned over to him by the state comptroller, or of which he may otherwise come into possession, and shall file a transcript of such inventories, certified by him as correct, in the court file of the receivership cause. He shall cause to be kept complete books of account of all transactions involving the assets and liabilities of the bank.

Miss. Code Ann. § 81-9-35 Dividends by receiver.

From time to time, upon order of the chancellor, the receiver shall pay dividends to such persons as may by right be thereunto entitled, and it shall be the duty of the receiver paying dividends to make every reasonable effort to locate the party or parties entitled thereto.

Miss. Code Ann. § 81-9-37 Reports by receiver; petition for discharge.

The receiver shall make such reports of his administration to the chancellor as the chancellor may require, which reports shall be filed in the court file of the receivership cause. Before the receivership cause shall be closed, a final report shall be made of such matters as may be required by the chancellor, and which shall include classified lists and totals of expenses; the gross amount of collections; classified lists and totals of disbursements to common creditors and other claimants; and all dividends on hand belonging to depositors, creditors, stockholders or others which for any reason have not been distributed; also the names of such depositors, creditors and stockholders, together with the amount of dividends belonging to each. The receiver shall file a petition for discharge with his final report, and the final report, together with said petition, shall remain on file subject to the inspection of any person interested. If the chancellor is satisfied with the final report of the receiver, he shall, by order entered on the minutes of the court, direct that the clerk of the court cause a notice to be run in a newspaper published in the county wherein the receivership is pending, or if none is so published, in some newspaper having a general circulation therein, which notice shall state that the liquidation of the bank has been completed and that the final report of the receiver and petition for his discharge are on file; that unless written objection is filed with the clerk of the court within thirty days from the date of the first publication of the notice, all persons shall be forever precluded from filing any claim against the bank or the receiver, and from questioning any of the acts of the receiver, except for fraud. Said notice shall be published once a week until the expiration of said thirty day period. Should the receiver have dividends on hand belonging to depositors, creditors, stockholders or others which have not been distributed the notice hereinabove referred to shall specify this fact, and shall give the name of each party who is entitled to such dividend, but it shall not be necessary to give the amount thereof. The notice shall direct that said parties call for said dividends prior to the day set for the filing of written objections, otherwise, their claim thereto shall be forfeited. On the day of the final hearing if there are dividends on hand which have not been called for, the receiver shall not be discharged, but the chancellor, by order entered on the minutes of the court, shall direct the receiver to make distribution of such unclaimed dividends to the known depositors and creditors pro rata. In the event the known depositors and creditors have already been paid in full, or if any are unpaid an amount in cash equal to that requisite to pay every such person, as shown to be due to them by the books of the bank is set apart and paid over in accordance herewith to the state comptroller as herein provided, the amount, if any, remaining shall be distributed to the stockholders pro rata. If on the day of the final hearing there are no dividends on hand for distribution and there have been no objections filed to the discharge of the receiver, the chancellor shall enter an order granting his discharge. If there are dividends on hand, the chancellor shall direct their distribution as above provided. Should written objections be filed to the discharge of the receiver within the time above provided, the chancellor shall set the matter for hearing in vacation or in term time as he may deem proper, and the same shall be proceeded with as any other action in chancery. In no event shall anyone be permitted to file an objection after the time specified in the notice above provided for. Should there be any dividends to stockholders not called for at the expiration of thirty days from the date the chancellor orders the distribution as above provided in subsection 3 of this section, the receiver shall pay the same and all amounts due to depositors and creditors who have not called for payment, to the state comptroller, who shall hold the same for the parties entitled thereto hereunder for a period of at least one year from the date of its receipt by him, and notice shall be given as hereinafter provided. Where any depositors’ liquidating corporation has not paid its depositors in full, and has realized everything possible from its assets, but still has on hand insufficient money to make a distribution to its creditors, the chancery court creating such corporation may, upon finding such facts, dissolve such liquidating corporation and discharge its directors and their sureties, and make such orders with respect to the cash on hand as may appear equitable and proper, after an application for a dissolution of said corporation, accompanied by a final report of the administration thereof from the date of the creation of said corporation, has been on file with the clerk of said court not less than thirty days, and notice of the filing thereof has been given by inserting one notice in a newspaper published in the county wherein the receivership is pending not less than ten days before the date set for the hearing thereof. Nothing contained in this section shall apply to any bank heretofore or hereafter liquidated by the Federal Deposit Insurance Corporation.

Miss. Code Ann. § 81-9-39 Compensation and expenses of receiver and attorney.

Compensation of the receiver and attorney shall be fixed by the court from time to time, upon a salary basis. In banks with total assets of one million dollars ($1,000,000.00) or more the salary of the receiver shall not exceed three hundred dollars ($300.00) per month and the salary of the attorney shall not exceed two hundred fifty dollars ($250.00) per month. In banks with total assets of less than one million dollars ($1,000,000.00) the salary of the receiver shall not exceed two hundred dollars ($200.00) per month and the salary of the attorney shall not exceed one hundred fifty dollars ($150.000) per month. The receiver and attorney shall also be allowed reasonable amounts for necessary expenses, all of which shall be a charge upon the assets of the bank. Any receiver, attorney, or employee may be removed for cause by the chancellor at any time. In the event a bank receivership shall be closed and the receiver and attorney finally discharged and it should appear after a lapse of ten (10) years from the date of the closing of said receivership that certain probable assets might be recovered for the benefit of depositors and creditors of said bank and the court shall reopen said receivership for the purpose of recovering said assets, the receiver or attorney, or both, so appointed by the court to recover said assets may be allowed for his services in lieu of the salaries above stated, a fee to be fixed by the court, and said fee may be either a cash fee or an interest in the property or thing recovered in the sole discretion of the court, and the court may allow such fee for services heretofore rendered for a period of not more than six (6) years prior to March 6, 1958.

Miss. Code Ann. § 81-9-41 Liquidation of solvent bank.

Any bank found to be solvent may be liquidated, if desired by the bank, in accordance with this section. It is the purpose of this section to require that the claims of all depositors and creditors as reflected by the books of the bank, be paid, whether proven or not, provided they are called for within the period stipulated in this section. The bank shall continue as a corporation until that authorized hereunder to be done has been accomplished whereafter its charter shall be surrendered as provided by law. If the receiver shall have heretofore paid, or shall hereafter pay, or have assets readily convertible for payment to each and every depositor, creditor and claimant of such bank whose claim or claims shall have been filed, whether duly proven and allowed or undisposed of, the principal amount, with additions, if any, shown by the books of the bank to be due by the bank, or if every such unpaid depositor, creditor or claimant for whom no such provision has been made as above, if any there be, consents thereto in writing, and the receiver shall have paid all expenses of the liquidation, all out of the assets of the failed bank, upon petition of a board of directors to be selected by the stockholders of the bank at a special meeting to be held therefor on call of any of the former officers of the bank, and with the consent of all claimants or creditors who have filed claims which have not been finally disposed of or which are disputed, and with the consent of every person, firm or corporation having a lien on the assets of the bank, if any there be, the receiver shall deliver to any such agent or agents of said bank, selected by the board of directors as hereinabove provided, upon a decree therefor made by the chancery court or the chancellor in vacation, all undivided and uncollected or other assets of said bank then remaining in his hands or under his control subject to any liens thereupon. On such delivery, the receiver and the surety on his bond shall be discharged from any and all liability to the bank, its creditors and all other persons, provided that (1) before making such delivery, the receiver shall have turned over to the state comptroller for depositors the principal amount, with additions, if any, shown by the books of the bank to be due by the bank to such depositors, and provided, (2) that the receiver shall file a final report showing all such matters and things as should be embraced in the final report hereinabove required for complete liquidation. Thereupon the chancellor shall by order entered direct that the clerk of the court cause a notice to be run in a newspaper published in the county where the receivership is pending, or if none is so published, in some newspaper having a general circulation therein, which notice shall state that the liquidation of the bank by the receiver is to be terminated and the assets remaining delivered to the bank as herein provided, and that the final report of the receiver has been filed and an application made to transfer the remaining assets in accordance herewith to an agent of the bank, and unless written objection is filed with the clerk within thirty days from the first publication of the notice, all persons shall be forever precluded from filing any claim against the receiver or from questioning any of the acts of the receiver except for fraud, or claims, demands and rights which are to be assumed by the bank and subject to which the transfer is to be made. Said notice shall be published once a week until the expiration of said thirty day period. All unpaid deposits, debts and dividends hereunder paid over to the state comptroller of banks shall be held in trust for the parties rightfully entitled thereto, to whom payment thereof shall be made, less any costs lawfully deductible therefrom. In case the state comptroller shall be in doubt as to the person or amount, he may file in regard thereto a bill of interpleader and thereupon be finally discharged, paying from such amount so deposited in court, the requisite costs for filing such bill. Within one year after receipt of any amount from a receiver, the state comptroller shall give notice of unclaimed amounts by publication in some newspaper having a general circulation in the county where such banking corporation was domiciled, once a week for three consecutive weeks, notifying such unpaid persons to come forward and claim the amounts due, and in said notice stating the amount of money received, the name of the party who is entitled to any portion thereof according to the books of the bank, but without specifying the amount, and shall command said parties to call for such amounts prior to the date fixed for payment to the state treasurer, and stating that unless they shall do so, the amounts will be paid over to the state treasurer in trust on or after a day therein to be named. After the expiration of said time, the state comptroller shall pay over such amounts held by him to the state treasurer, less any publication or other costs incurred in connection therewith and give to the state treasurer a list of all persons entitled to any amount together, if possible, with the amount thereof and the residence, if possible, of such person. Thereupon the state treasurer shall be required to place the amount so paid over to him in a special trust fund in the state treasury for the benefit of any and all persons rightfully entitled thereto, and thereafter when said funds are so paid over, there shall be no further liability on the bank, its receiver, the state comptroller, his bond or any other agent or employee, for any amount so thus paid over to the state treasurer under this section. Persons rightfully entitled to any such amounts so paid over into this trust fund shall be paid the amount thereof direct from such trust fund by the state treasurer without specific appropriation therefor, such payment to be made by the state treasurer upon requisition drawn by the state comptroller on the written approval of the attorney general. The state comptroller and the state treasurer shall have power to pay from such amount on hand the cost of any publication and other expense items properly incurred chargeable thereto, which amounts shall be deducted from the amount to be paid over. The state comptroller or the state treasurer may apply the interest earned by the money so held by either of them, if any, towards defraying the expenses of the payment and the distribution to the persons entitled. After the expiration of fifteen (15) years from the date of the receipt of such amount by the state treasurer, the deposits and amounts then unclaimed shall be placed by the state treasurer in the general fund of the State of Mississippi, and such fund shall belong to the State of Mississippi, free from the claims of all persons whatsoever. The delivery of such assets to such agent of said bank, selected as aforesaid, and the discharge of such receiver shall not release, discharge or affect any right, claim or action which any creditor or claimant consenting to such transfer and discharge might then or thereafter have against said bank, or the stockholders of the bank on account of their double liability, if any, if the assets of the bank are insufficient to pay said creditors’ or claimants’ claims in full, with interest, if any is due; it being the intention hereof that the liability of the bank and its stockholders, if any, shall not be affected or released by the discharge of the receiver. The court having jurisdiction of the receivership shall retain jurisdiction over any suit, petition or proceeding brought pursuant hereto, and especially involving a contested claim for depositor or creditor, and such suit, or suits, may be as fully and completely determined and adjudicated by said court as if had under the receivership. Such agent or agents under the direction of the board of directors of said bank shall convert the assets coming into his or their possession into cash, if so directed, and after paying all taxes and any and all unpaid claims, lawfully established, and the expenses of said liquidation, shall distribute the assets in cash or kind pro rata among the stockholders of the bank in proportion to the stock held by each and every stockholder. Such bank may from time to time hold meetings of its stockholders in accordance with its by-laws for the election of boards of directors and such other corporate business as may properly come before the meeting looking towards its liquidation, and such directors may, from time to time, replace such agent or agents in charge of such liquidation, paying such agent or agents such compensation as they may determine. All expenses of such liquidation by such agent or agents shall be subject to approval by the board of directors of the bank. Prior to or contemporaneously with the delivery of said assets to the agent or agents of said bank, it shall be a condition thereto that all persons having a direct lien on the assets of the trust and also all persons having an undisposed of disputed claim, if any there be, pending in the receivership, be required to give their consent in writing to the release of the assets in the hands of the receiver to the bank. When the court is satisfied of compliance with all requirements hereinbefore contained, a decree shall be entered which shall have the effect (1) to discharge the receiver and his surety from all liability to all persons; (2) to revest title to all assets withheld by the receiver in the old banking corporation and to vest such corporation with full authority to receive and deal with such property for purposes only of effective liquidation.

Miss. Code Ann. § 81-9-43 Procedure to obtain depositors’ liquidation.

Proceedings to accomplish depositor liquidation of banks shall be begun by the filing of a petition in the chancery court of the county in which such bank shall be domiciled within the ninety day period in which the state comptroller remains in charge of the closed bank. Each petition shall be signed by depositors owning sixty percent in amount of deposits not preferred and totally unsecured, and the allegations thereof shall be sworn to by at least one of the signers of the petition, either as true and correct upon personal knowledge, or upon information and belief. If any signer be a corporation the signature thereof by the president or vice-president shall be sufficient, and the signature of any partnership or similar firm by any member thereof shall be sufficient. The state comptroller shall be the only necessary party respondent to such petition. The petition may be heard by the chancellor in vacation or in term time, at such place in his district as he may direct, upon certificate of the chancery clerk that he has sent, at least five days before such hearing, by registered mail, to the respondent at the city of Jackson, Mississippi, a true copy of the petition, with time and place of hearing designated thereon. The cause in which such petition shall be filed shall be entitled “In the matter of the depositor liquidation of (name of bank proposed to be liquidated) by (naming here the liquidating corporation proposed to be formed).”

Miss. Code Ann. § 81-9-45 Petition and decree thereon.

If the petition shall be signed and sworn to as aforesaid, and shall pray that the liquidation of the bank shall be conducted by the depositors and that a liquidating corporation be formed for such purpose, the chancellor shall, by decree on such petition, create a liquidating corporation, not for pecuniary gain, and without capital or capital stock. The decree shall name five directors for the corporation who shall be natural persons chosen by the chancellor from among the signers of the petition, but such signers as may be named as directors in the petition shall be so named in the decree. The decree shall give the corporation a name, which shall include the words, “liquidating corporation,” preceded by the name of the bank to be liquidated. The municipality in which the bank to be liquidated is domiciled shall be the domicile of the corporation. The decree shall be recorded on the book of corporation charters in the office of the chancery clerk of the proper county, and need not be published.

Miss. Code Ann. § 81-9-47 Effect of decree.

The signing of the decree shall divest the state comptroller and the department of bank supervision of all title to the assets of the bank and of all control of the liquidation thereof, and the state comptroller and the department shall be relieved of future liability thereto, except for proper delivery of the assets of the corporation. The recording of a certified copy of the decree in the deed records of any county shall have the same effect as the recording of a deed to the assets.

Miss. Code Ann. § 81-9-49 General powers of liquidating corporation.

Liquidating corporations created under the authority of this chapter shall be bodies corporate and politic, with power to sue and be sued by their respective corporate names. No action shall be begun against any such corporation except in the county in which it is domiciled. The corporation shall have as its seal the seal of the bank which it is liquidating. Such corporation shall have generally the powers and responsibilities of receivers with respect to the assets and liabilities of all banks which they shall liquidate. Acts involving discretion shall be subject to approval of the chancery court, except as herein specifically provided.

Miss. Code Ann. § 81-9-51 Double liability of certain stockholders released.

Such corporation shall have power to bring suits to enforce any liability of directors or officers of the bank, but the double liability of stockholders, as provided in Section 81-5-27, by the turning over of the liquidation by the depositors as herein provided, shall be released as to all stockholders of any such bank. However, no stockholder shall be refunded any sum of money which he may have actually paid in discharge of his double liability, nor shall the release of double liability provided by this section be construed to extend to any instance where a stockholder shall have executed a promissory note or other instrument of writing in settlement of such double liability. All double liabilities of stockholders, as referred to in this section, are canceled and released with respect to future liquidations.

Miss. Code Ann. § 81-9-53 Bond of directors; compensation.

Each director shall make bond, conditioned to perform faithfully his duties as director, payable to the corporation, with such surety or sureties as the chancellor may approve, and in such sum as the chancellor may, from time to time, direct, but in no case less than $2,000.00 for any one director. Such bonds shall serve generally the same purposes and be of the same general effect as a receiver’s bond, and action upon such bonds may be brought by any party aggrieved. No action shall lie, however, against any director or upon any director’s bond because of the exercise of any power recited in Section 81-9-61, excepting only instances of actual abuse of discretion. No director shall be entitled to compensation as such, but the chancellor, may, in his discretion, allow conservative compensation on a salary basis for designated period of time, in instances where an unreasonable amount of any director’s time shall be required for the faithful performance of his duties.

Miss. Code Ann. § 81-9-55 Vacancies and removal of directors.

Vacancies among directors shall be filled by the chancellor on ex parte hearing in term time, or in vacation, but the choice of any four remaining directors shall be the choice of the chancellor, except for good cause shown. Removal of directors shall be in the discretion of the chancellor, in term time or in vacation, on petition of any party aggrieved, and upon such notice not less than five days as the chancellor may direct.

Miss. Code Ann. § 81-9-57 Officers of the corporation.

The directors shall choose from among themselves a president and a vice-president of the corporation. They shall also employ a liquidator who shall be ex officio secretary-treasurer of the corporation, and who need not be a depositor in the bank being liquidated by the corporation. No officer, except the liquidator, shall be entitled to compensation as such. The liquidator shall furnish bond, payable to the corporation, in such amount and with such surety or sureties as may be approved by the directors, conditioned to perform his duties faithfully as liquidator, and action upon such bond may be brought by any party aggrieved.

Miss. Code Ann. § 81-9-59 Compensation of liquidator and other employees.

The directors shall fix the compensation of the liquidator, may employ and fix the compensation of counsel for the corporation; and may employ and fix the compensation of such clerical and other employees as they may deem necessary or advisable to carry on the business of the corporation.

Miss. Code Ann. § 81-9-61 Exercise of discretion without approval of court.

By authority of order on the minutes signed by all five directors, the corporation may do and perform, without approval of court, the following, to-wit: Employ and fix the compensations of the liquidator, counsel and other employees; Lease premises to be occupied by the corporation as business quarters; Borrow money, execute promissory notes, and pledge or mortgage the assets of the corporation; Compromise or extend indebtedness due the bank being liquidated, and release and surrender securities and collaterals; Compromise claims against the bank; Sell any or all assets of the bank for cash or on other terms; Barter or exchange any assets of the bank for other property; Lease any property belonging to the bank; Pay dividends to creditors or stockholders of the bank.

Miss. Code Ann. § 81-9-63 Sale of assets to going bank.

By and with the approval of the chancellor and of the state comptroller any liquidating corporation may sell any portion or all of the assets of the bank being liquidated by such corporation to an active and operating bank, the purchase price to be in cash or on terms, or otherwise; or, the purchasing bank may be allowed to assume a percentage of the liabilities of the insolvent bank, with optional privilege to the creditors to receive cash or other property in settlement of their claims. Under this section chancellors shall have broad powers and discretion to approve plans which are for the best interests of creditors of closed banks taken as a whole.

Miss. Code Ann. § 81-9-65 Corporation and directors may be restrained.

On petition of any party aggrieved, filed in the depositor liquidation cause, the liquidating corporation and its directors and officers may, as in other cases, be enjoined by the chancellor from actual abuse of discretion.

Miss. Code Ann. § 81-9-67 Liquidating corporations may apply to court for directions.

Liquidating corporations shall have the power to apply in vacation to the chancellor for orders and directions concerning the liquidation, and this section shall be liberally construed in favor of speedy and economical liquidations.

Miss. Code Ann. § 81-9-69 Records and inspection thereof.

Full and complete minutes shall be kept of all proceedings of the directors, and full and complete records and books of account shall be kept by the corporation. The directors shall have discretion to grant to parties of interest reasonable inspection and permission to take copies of all such minutes, records and books, and such reasonable inspection and right to take copies may be ordered by the chancellor in term time or vacation, upon reasonable notice to the corporation of time and place of a hearing on any petition seeking such inspection and right to take copies.

Miss. Code Ann. § 81-9-71 Final report and dissolution of the corporation.

When the affairs of the bank shall be completely liquidated, or liquidated in so far as it is practical for the directors so to do, they shall make, or cause to be made, to the chancery court of the county in which the corporation is domiciled a final report, the correctness of which shall be sworn to by at least one director of the corporation, either upon personal knowledge or upon information and belief, after a careful examination of the report. Such report shall include the gross amount of collections and the total amount of all disbursements to common creditors, depositors, or other claimants, and the amount of all dividends on hand belonging to common creditors, stockholders, or others, which for any reason have not been distributed and they shall also file as part of such report the following books and records of said corporation, to wit: The journal and the general ledger kept by the corporation and the minute book of the corporation and also the ledger showing the amount due each depositor and other creditors at the time the corporation was created and upon which dividends were paid, or such other books, set of books, or records used by or that were set up by said corporation which reveal the above enumerated facts, and if available the audit of the department of bank supervision showing all assets and liabilities of the bank in liquidation. The directors shall file a petition for their discharge and a dissolution of the corporation with their report, and the final report together with said petition shall remain on file subject to the inspection of any person interested for the time and in the manner hereinafter provided. Upon the filing of said petition and report in the chancery clerk’s office in the county in which the corporation is domiciled, the clerk shall immediately notify the chancellor by registered mail of the filing of said petition and report whereupon the chancellor by order entered upon the minutes of the court shall direct the clerk of the court to have a notice published in some newspaper in the county wherein the corporation is domiciled, or if none is so published, then in some newspaper having a general circulation therein, which notice shall state that the liquidation of the bank has been completed and that the final report of the directors and petition for their discharge and dissolution of the corporation are on file; that unless written objection is filed with the clerk of the court within forty-five (45) days from the date of the first publication of the notice, all persons shall be forever precluded from filing any claim against the bank, corporation, or the directors and officers, and from questioning any of the acts of the directors or officers except for fraud. Said notice shall be published once a week for four successive weeks. Should the directors have dividends on hand belonging to the depositors, creditors, stockholders or others which have not been distributed, the notice hereinabove referred to shall specify this fact, and shall give the name of each party who is entitled to such dividend, but it shall not be necessary to give the amount thereof. The notice shall direct that said parties call for said dividends prior to the day set for the filing of written objections, otherwise their claim thereto shall be forfeited. On the day of the final hearing if there are dividends on hand which have not been called for, the directors shall not be discharged, or the corporation dissolved, but the chancellor by order entered on the minutes of the court shall direct the directors to make distribution of such unclaimed dividends to the known depositors and creditors pro rata; provided, that in the event the known depositors and creditors have already been paid in full, such unclaimed dividends shall be distributed to the stockholders pro rata. If on the day of the final hearing there are no dividends on hand for distribution and there have been no objections filed to the discharge of the directors and the dissolution of the corporation, the chancellor shall enter an order granting the discharge of the directors and a dissolution of the corporation. If there are dividends on hand, the chancellor shall direct their distribution as above provided. Should written objections be filed to the discharge of the directors and the dissolution of the corporation within the time above provided, the chancellor shall set the matter for hearing in vacation or term time as he may deem proper, and the same shall be proceeded with as any other action in chancery. In no event shall anyone be permitted to file objections after the time specified in the notice above provided for. Should there be any dividends not called for at the expiration of forty-five (45) days from the date the chancellor orders the distribution as provided in subsection (3) hereof, the directors shall pay the same to the state comptroller who shall hold the same for parties entitled thereto for a period of one year from the date of the order of the chancellor directing the distribution. If said funds are not called for before the expiration of said period, the owners shall lose all right thereto, and the state comptroller shall pay the same, or so much thereof as remains in his hands, into the state treasury. Upon the directors making the distribution provided for in subsection (3) hereof, either by paying said funds to the parties entitled thereto, or by paying the same or a part thereof to the state comptroller, they shall report such fact to the chancellor, who shall enter his decree granting the discharge of the directors and the dissolution of the corporation, and the court or chancellor in vacation, shall have the power and authority during the course of proceedings under this section to make all such orders as he may deem right and proper to fully carry out the purposes of this section. When the final decree of the discharge and dissolution is entered by the court or chancellor in vacation, it shall be the duty of the clerk to immediately turn over to the state comptroller all the books of the corporation which have been filed with said cause and take a receipt from said comptroller therefor and file said receipt with the papers in said cause. It shall be the duty of the state comptroller to receive said books, and receipt therefor and to file and preserve the same in his office as other bank records.

Miss. Code Ann. § 81-9-73 When Federal Deposit Insurance Corporation or any similar corporation to be appointed receiver.

Whenever the state comptroller shall apply for appointment of a receiver under the provisions of this chapter, and the deposits of such bank shall be to any extent insured by the Federal Deposit Insurance Corporation, or any similar corporation organized under the laws of the United States, and it shall appear that said corporation will accept the receivership of said bank, then it shall be mandatory upon the chancellor to appoint said Federal Deposit Insurance Corporation, or any similar corporation organized under the laws of the United States, receiver of such bank. In such event, the receivership may be conducted by the Federal Deposit Insurance Corporation or any similar corporation organized under the laws of the United States, at its option, in the proper chancery court of this state and under the provisions of this chapter applicable to other bank receivers. In all instances in which the Federal Deposit Insurance Corporation, or any similar corporation organized under the laws of the United States, shall pay any portion of the deposits of a bank in this state, it shall be fully subrogated to the position of depositors in so far as such payments are made and as equity and justice may appear.

Miss. Code Ann. § 81-9-75 Priority of claims for payment against certain insolvent banks upon liquidation or upon execution of purchase of assets and assumption of liabilities.

On liquidation of a state or private bank or on execution of a purchase of certain assets and assumption of certain liabilities of a state bank under this chapter, claims for payment against that state bank have the following priority: Obligations incurred by the Banking Commissioner, fees and assessments due to the Department of Banking and Consumer Finance, and expenses of liquidation, including any taxes due, all of which may be covered by a proper reserve of funds; Claims of depositors having an approved claim against the general liquidating account of the bank; Claims of salaried employees of the bank for salaries that are earned but unpaid at the time the bank is closed or purchased under this chapter; Claims of general creditors having an approved claim against the general liquidating account of the bank; Claims otherwise proper that were not filed within the time prescribed by this code; Approved claims of subordinated creditors; and Claims of stockholders of the bank.
Source: Public.Resource.Org MS CodeURL: https://unicourt.github.io/cic-code-ms/transforms/ms/ocms/r78/gov.ms.code.title.81.htmlFetched: 6/10/2026

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