December 20, 1996
Dear [ ]:
This is in response to your recent letter. You represent [ ], Esq., Chapter 7 trustee for the estate of [ ], which estate includes approximately 80% of the issued and outstanding shares of [ ] Bank ("Bank"). By virtue of section 143-b(5), and extensions granted by the Department, the trustee has until February 21, 1997, to file a change of control application with the Banking Department. In attempting to call a meeting of the stockholders to elect directors, [ ] was advised by the Bank that he could not call such a meeting without giving advance notice to the Banking Department and the Federal Deposit Insurance Corporation ("FDIC") and that in any event he could not call a meeting because he was not the "holder of record" of the shares in question. You have asked me to confirm whether either assertion of the Bank is true.
There is no requirement in the New York Banking Law which requires that it be given advance notice of a bank stockholder meeting where directors will be elected. Part 25 of the Banking Regulations, which permits the Superintendent to require such advance notice, would appear to be inapplicable in this case. In addition, I know of no FDIC regulation that would require such a notice either, but you may wish to contact the FDIC for verification.
Finally, in connection with the exercise of control by the trustee during the interim period in which the trustee is a control party by operation of law but has not yet been formally approved by the Department, assuming that the trustee has complied with section 6012(3) of the Banking Law and has had the subject shares transferred into his name as trustee, the Department would interpose no objection to the trustee actually exercising control of the stock by calling stockholder meetings and voting the stock. As a general matter, though, you should note that the Banking Department wishes to remain fully informed as to any major changes that take place at the institutions that the Department charters and regulates, and thus I recommend that you keep Department Examiner Joseph Federico informed as events unfold.
If you have any questions, please feel free to contact me.
Very truly yours,
Kathleen A. Scott
cc: Joseph Federico