[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR627.2797]



[Page 288]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 627_TITLE IV CONSERVATORS, RECEIVERS, AND VOLUNTARY LIQUIDATIONS

--Table of Contents

 

                     Subpart D_Voluntary Liquidation

 

Sec. 627.2797  Preservation of equity.



    (a) Immediately upon the adoption of a resolution by its board of 

directors to voluntarily liquidate a Farm Credit institution, the 

capital stock, participation certificates, equity reserves, and 

allocated equities of the Farm Credit institution shall not be issued, 

allocated, retired, sold, distributed, transferred, assigned, or applied 

against any indebtedness of the owners of such equities. Such activities 

could resume if the stockholders of the Farm Credit institution 

disapprove the resolution to liquidate or the Farm Credit Administration 

Board disapproves the liquidation plan. In the event the resolution to 

liquidate is approved by the stockholders of the Farm Credit institution 

and the liquidation plan is approved by the Farm Credit Administration 

Board, the liquidation plan shall govern disposition of the equities of 

the Farm Credit institution, except that if the Farm Credit institution 

is placed in receivership, the provisions of Sec. 627.2730(a) shall 

govern further disposition of the equities of the Farm Credit 

institution.

    (b) Notwithstanding paragraph (a) of this section, eligible borrower 

stock shall be retired in accordance with section 4.9A of the Act.