(1) DEFINITION. In this section, “circuit court” means the circuit court of Dane County, notwithstanding s. 801.50. (1m) CONDITIONS FOR TAKING POSSESSION. The division may take possession of the business and property of any association to which this chapter applies if the division finds that the association: (a) Is conducting its business contrary to law; or (b) Has violated its charter or any law; or (c) Is conducting its business in an unauthorized or unsafe manner; or (d) Is in an unsound or unsafe condition to transact its business; or (e) Has an impairment of its savings accounts; or (f) Cannot with safety and expediency continue business; or (g) Has suspended payment of its obligations; or (h) Has failed to comply with an order of the division; or (i) Has refused to submit its books, papers, records or affairs for inspection; or (j) Has refused to be examined upon oath regarding its affairs. (2) PROCEDURE AFTER TAKING POSSESSION. After taking possession of the business and property of an association, the division shall immediately: (a) Serve written notice on an officer of the association stating that the division has taken possession and control of the business and property of the association. A copy of the notice and proof of service thereof shall be filed with the clerk of circuit court. (b) Mail notice to the last-known address of any person known to the division to be in possession of assets of the association. (3) EMPLOYMENT OF COUNSEL; RETENTION OF OFFICERS AND EMPLOYEES OF ASSOCIATION. The division may employ necessary counsel and experts in a liquidation under this section and may retain any officer or employee of the association. (4) APPOINTMENT OF SPECIAL DEPUTY. The division may appoint special deputies as agents to assist in the liquidation and distribution of the assets of associations whose business and property the division has taken possession of. A certificate of the appointment shall be filed with the division and a certified copy shall be filed in the office of the clerk of circuit court. (5) SURETY BONDS OF SPECIAL DEPUTIES AND ASSISTANTS. Special deputies and assistants shall furnish surety bonds in accordance with s. 215.11. (6) DUTIES OF SPECIAL DEPUTIES. (a) Notice, allowance and payment of claims. The special deputy shall publish a class 3 notice, under ch. 985, requiring all persons who have claims against the association, other than savers whose claims are shown in the records of the association, to file proof of their claims at a place and by a date not earlier than 30 days after the last insertion of the notice. The special deputy shall mail a copy of the notice to all persons, at their last-known addresses, who appear as creditors upon the books of the association. Proof of publication and service of the notice shall be filed with the clerk of circuit court. A claim, other than that of a saver whose claim is shown on the records of the association, for which no proof of claim is filed by the date fixed in the notice is barred. Savers whose claims are shown in the records of the association need not file proof of their claims. Any interested party may file written objections to any claim with the special deputy. The special deputy may reject any claim, including a claim of a saver. After notice by registered mail of rejection, the claim is barred unless the claimant commences an action within 90 days after the date of mailing of the notice of rejection. (b) Inventory of assets and statement of liabilities. The special deputy appointed under this section shall make an inventory of the assets of the association. One copy of the inventory shall be filed with the division and one in the office of the clerk of circuit court. After the time for filing proof of claims has expired, the special deputy shall make a complete list of the claims for which proof of claims were filed and specify the claims the special deputy has rejected. One copy shall be filed with the division and one in the office of the clerk of circuit court. The inventory of assets and list of claims shall be open to inspection. (c) Execution of legal documents; borrowing of money. A special deputy appointed under this section may, with the prior approval of the division and the circuit court, execute, acknowledge and deliver all deeds, assignments, releases or other instruments necessary and proper to effect any sale or transfer or encumbrance of the property of an association subject to this section and may borrow money for use in the liquidation. (d) Conservation of assets; collection of claims; sale of assets and performance of any other acts upon order of the court. A special deputy appointed under this section may take any action necessary to conserve the assets and business of an association subject to this section and shall proceed to liquidate its affairs. The special deputy shall collect all claims belonging to the association, and, with the prior approval of the division and the circuit court, may sell or compound all bad or doubtful claims, do any act or execute any necessary instruments, or sell the property of the association. (e) Depositing of moneys in one or more financial institutions. The moneys collected by the special deputy under this section shall be deposited in financial institutions, and in case of the suspension or insolvency of the depository the deposits shall be preferred before all other deposits. (em) Claims against association. Claims against an association subject to this section shall be satisfied according to the following priority: 1. All costs, expenses and debts of the association incurred on or after the date on which the division takes possession of the association. 2. All claims which are secured by, or which are liens on, assets of the association, to the extent of the value of the assets. 3. All portions of secured claims which remain unsatisfied and unsecured claims on equal priority and proportionate basis, except subordinated debt shall be paid according to the terms of the contract evidencing it. (f) Liquidating dividends. After the date fixed for filing proof of claims under s. 215.32 (6) (a), the special deputy may, with the prior approval of the division and the circuit court, out of the funds remaining after the payment of costs, expenses, debts and claims under par. (em), declare liquidating dividends, and may declare a final liquidating dividend. The liquidating dividends shall be paid to those persons, in those amounts directed by the circuit court. (g) Notice prior to order for final distribution. Prior to the order for final distribution under par. (f), the special deputy shall publish a class 3 notice, under ch. 985, and give such further notice as the circuit court directs, requiring all persons who have claims against the association arising during the liquidation proceedings to file proof of their claims at a place and by a date not earlier than 30 days after the last insertion of the notice. Proof of publication of the notice shall be filed with the clerk of circuit court. A claim for which no proof of claim is filed by the date fixed in the notice is barred. Any interested party may file written objection to any claim with the special deputy. The special deputy may reject any claim. After notice by registered mail of rejection, the claim is barred unless the claimant commences an action within 90 days after the date of mailing of the rejection. (h) Transfer of residual assets to division. After the order for final distribution has been made under par. (f), the special deputy shall, with the approval of the division and the circuit court, assign all assets, claims and demands that have been written off and considered worthless, and all unknown assets, to the division. The division may accept and hold the assets, claims and demands, with the power to compound, compromise, settle and assign them and execute and deliver any legal instrument incidental thereto without court approval. Any moneys received shall be paid into the general fund of the state after the division has deducted the cost of division services, attorney fees and other incidental expenses. (7) UNCLAIMED LIQUIDATING DIVIDENDS AND UNCLAIMED FUNDS. (a) 1. The special deputy shall deliver to the division: a. Any unclaimed liquidating dividends and all funds remaining in the hands of the special deputy at the date of the order for final distribution. b. All final liquidating costs. 2. The division shall deposit moneys delivered under subd. 1. in a financial institution, to the credit of the division in trust for the persons entitled to the moneys. 3. The division shall include in the annual report under s. 215.02 (11): a. The names of associations liquidated. b. The sums of unclaimed and unpaid liquidating dividends and unclaimed funds with respect to each liquidated association. c. A statement of interest earned upon such funds. (c) The division may: 1. Pay the moneys so held to the persons entitled thereto, upon being furnished satisfactory evidence of their right to the same. 2. In case of doubt or conflicting claims, require an order of the circuit court directing the payment. 3. Apply the interest earned by the moneys so held towards defraying the expenses in the payment and distribution of unclaimed liquidating dividends and funds to the persons entitled to the same. (d) The division may make application to the circuit court for an order determining what books or records of an association subject to this section are to be kept or destroyed. All books or records ordered kept shall be kept in a manner and place ordered, subject to the further order of the circuit court. The expense of keeping books or records shall be paid before final distribution. All books or records ordered destroyed shall be delivered to the division to be destroyed. (8) TITLE PASSES TO DIVISION. The possession of and title to all property of the association is transferred from the association to the division on the date the notice required by sub. (2) is filed. The filing of the notice bars any attachment, garnishment, execution or other legal proceedings against the association or its property. (9) EFFECT OF POSSESSION. No association shall have a lien or charge for any payment, advance or clearance made or liability incurred, against any of the assets of the association after the division has possession. (10) ACTION TO ENJOIN PROCEEDINGS. An association subject to this section may, within 10 days after the notice required under sub. (2) is filed, apply to the circuit court to enjoin further proceedings. The circuit court, after citing the division to show cause why further proceedings should not be enjoined and hearing the matter, may enjoin the division from further proceedings, and direct the division to surrender the association’s business and property to the association. (11) COMPENSATION AND EXPENSES IN CONNECTION WITH LIQUIDATION. The compensation of the special deputies, counsel and other employees and assistants and all expenses of supervision and liquidation shall be fixed by the division, subject to the approval of the circuit court, and shall upon the certificate of the division be paid out of the funds of the association. Such expenses include the cost of the service rendered by the division to the association and shall be determined from time to time by the division and shall be paid to the division from the assets of the association. (13) REINSTATEMENT. Whenever the division has taken possession of the business and property of any association, the association may resume business when: (a) In the case of a mutual association, the owners of at least two-thirds of such association’s dollar value aggregate of outstanding savings accounts or, in the case of a capital stock association, the owners of at least two-thirds of the association’s outstanding shares, execute a petition to such effect, in the form prescribed by the division; (b) Such members, savers or stockholders, or a committee selected by them, submit to the division a plan for the reorganization and reinstatement of the association; (c) The division recommends that control of the business and property of the association be returned to the directors; and (d) The court in which such liquidation is pending, upon application of the division, finds that the association will be in a safe and sound condition when control is resumed by the directors. (14) REINSTATEMENT UPON A RESTRICTED BASIS. Such association may resume business upon a restricted basis, and upon limitations and conditions prescribed by the division when approved by the circuit court, upon application of the division. Such restrictions and conditions may include a prohibition against the acceptance of payments on new savings accounts, reasonable restrictions upon withdrawals of savings accounts and the payment of other liabilities. Such associations shall thereupon be relieved from the control of the division. (15) PROCEDURE UPON TAKING POSSESSION OF ASSOCIATION WHOSE SAVINGS ACCOUNTS ARE INSURED BY DEPOSIT INSURANCE CORPORATION. (a) The division may, if the division takes possession of any association, the savings accounts of which are to any extent insured by the deposit insurance corporation, tender to the deposit insurance corporation the appointment as statutory liquidator of such association. If the division does not make such tender, the division shall tender to the deposit insurance corporation the appointment as statutory co-liquidator to act jointly with the division, but the co-liquidatorship shall not be for more than one year from the date of such tender, at the expiration of which time the division shall become the sole liquidator except as herein otherwise provided. The division shall tender to the deposit insurance corporation the appointment as sole statutory liquidator of such association whenever the deposit insurance corporation has become subrogated to the rights of 90 percent of the liability of the association on savings accounts. If the deposit insurance corporation becomes subrogated as to all the savings accounts in the association, it may then exercise all the powers and privileges conferred upon it without court approval. (b) If the corporation accepts the appointment as sole liquidator it shall possess all the powers and privileges of the division as statutory liquidator of a possessed savings and loan association, and be subject to all the duties of the division as sole liquidator, except insofar as such powers and privileges or duties are in conflict with federal laws, and except as herein otherwise provided, unless such association resumes business, pursuant to subs. (13) and (14). If the corporation accepts the appointment as co-liquidator, it shall possess such powers and privileges jointly with the division and shall be subject to such duties jointly with said division. (c) In the event the corporation accepts the appointment as coliquidator or liquidator, it shall file such acceptance with the division and the clerk of the circuit court and it may act without bond. Upon the filing by the corporation of its acceptance of the appointment as sole liquidator, the possession of and title to all the assets, business and property of the association shall vest in the corporation without the execution of any conveyance, assignments, transfer or endorsement. Upon the filing by the corporation of its acceptance of the appointment as co-liquidator, such possession and title shall be vested in the division and the corporation jointly. If the corporation does not qualify as sole liquidator at or before the time herein provided for the expiration of the co-liquidatorship, the corporation shall be wholly divested of and from such joint title and possession and the sole title and possession shall thereupon vest in the division. The vesting of title and possession of the property of the association, under sub. (8), shall not render such property subject to any claims or demands against the federal corporation, except such as may be encumbered by it with respect to such association and its property. Whether or not it serves as aforesaid, the corporation may make loans on the security of or may purchase with the approval of the court, except as herein otherwise provided, all or any part of the assets of any association, the savings accounts of which are to any extent insured by it, but in the event of such purchase, the corporation shall pay a reasonable price. (d) Whether or not the corporation serves as liquidator, whenever it pays or makes available for payment the savings accounts of any such association in liquidation which are insured by it, it shall be subrogated upon the surrender and transfer to it of such savings accounts, with respect thereto, but such surrender and transfer shall not affect any right which the transferor has in such savings accounts which are not paid or made available for payment or any right to participate in the distribution of the net proceeds remaining from the disposition of the assets of such association; provided, that the rights of the investors and creditors of such association shall be determined in accordance with the applicable laws of the state.
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