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12 U.S.C. § 5389 — Mandatory terms and conditions for all orderly liquidation actions
Federal law — U.S. Code and appendices · legal_authorities
In taking action under this subchapter, the Corporation shall—
(1) determine that such action is necessary for purposes of the financial stability of the United States, and not for the purpose of preserving the covered financial company;
(2) ensure that the shareholders of a covered financial company do not receive payment until after all other claims and the Fund are fully paid;
(3) ensure that unsecured creditors bear losses in accordance with the priority of claim provisions in [section 5390 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5390&num=0&edition=prelim);
(4) ensure that management responsible for the failed condition of the covered financial company is removed (if such management has not already been removed at the time at which the Corporation is appointed receiver);
(5) ensure that the members of the board of directors (or body performing similar functions) responsible for the failed condition of the covered financial company are removed, if such members have not already been removed at the time the Corporation is appointed as receiver; and
(6) not take an equity interest in or become a shareholder of any covered financial company or any covered subsidiary.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5389
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Stable record: federal_law:legal_authorities:record_usc_dd559d9d0ac811a50afd70da
Source file: Laws/federal/codes/united-states-code/title-12/section-5389-mandatory-terms-and-conditions-for-all-orderly-liquidation-actions--6732bf64ff.md
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Passage SHA-256: 0d84fb48002e38ebb48a68924e7d38696c3ebdb5f481fc4d4d58069794ce2186
Source location: Title 12, Chapter 53, § 5389; chapter-053-wall-street-reform-and-consumer-protection.md
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In taking action under this subchapter, the Corporation shall—
(1) determine that such action is necessary for purposes of the financial stability of the United States, and not for the purpose of preserving the covered financial company;
(2) ensure that the shareholders of a covered financial company do not receive payment until after all other claims and the Fund are fully paid;
(3) ensure that unsecured creditors bear losses in accordance with the priority of claim provisions in [section 5390 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5390&num=0&edition=prelim);
(4) ensure that management responsible for the failed condition of the covered financial company is removed (if such management has not already been removed at the time at which the Corporation is appointed receiver);
(5) ensure that the members of the board of directors (or body performing similar functions) responsible for the failed condition of the covered financial company are removed, if such members have not already been removed at the time the Corporation is appointed as receiver; and
(6) not take an equity interest in or become a shareholder of any covered financial company or any covered subsidiary.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** The Secretary is authorized to promulgate regulations to implement and administer the grant programs and undertakings authorized by this subchapter.
**(b) Regulatory authority** Regulations prescribed under this section may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of grant programs, undertakings, or eligible entities, as, in the judgment of the Secretary, are necessary or proper to effectuate the purposes of this subchapter, to prevent circumvention or evasion of this subchapter, or to facilitate compliance with this subchapter.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5301
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Federal law — U.S. Code and appendices · legal_authorities
The members of the board of directors (or body performing similar functions) of a covered financial company shall not be liable to the shareholders or creditors thereof for acquiescing in or consenting in good faith to the appointment of the Corporation as receiver for the covered financial company under [section 5383 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5383&num=0&edition=prelim).
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5390
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Powers and authorities**
(1) **General powers**
(A) *Successor to covered financial company* — The Corporation shall, upon appointment as receiver for a covered financial company under this subchapter, succeed to—
(i) all rights, titles, powers, and privileges of the covered financial company and its assets, and of any stockholder, member, officer, or director of such company; and
(ii) title to the books, records, and assets of any previous receiver or other legal custodian of such covered financial company.
(B) *Operation of the covered financial company during the period of orderly liquidation* — The Corporation, as receiver for a covered financial company, may—
(i) take over the assets of and operate the covered financial company with all of the powers of the members or shareholders, the directors, and the officers of the covered financial company, and conduct all business of the covered financial company;
(ii) collect all obligations and money owed to the covered financial company;
(iii) perform all functions of the covered financial company, in the name of the covered financial company;
(iv) manage the assets and property of the covered financial company, consistent with maximization of the value of the assets in the context of the orderly liquidation; and
(v) provide by contract for assistance in fulfilling any function, activity, action, or duty of the Corporation as receiver.
(C) *Functions of covered financial company officers, directors, and shareholders* — The Corporation may provide for the exercise of any function by any member or stockholder, director, or officer of any covered financial company for which the Corporation has been appointed as receiver under this subchapter.
(D) *Additional powers as rec
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 5393
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Federal law — U.S. Code and appendices · legal_authorities
Page 1881
TITLE 12—BANKS AND BANKING
§ 5390
case commenced under the Bankruptcy Code),
and upon notice to SIPC (with respect to a cov-
ered broker or dealer) and no such case or pro-
ceeding may be commenced with respect to a
covered financial company at any time while
the orderly liquidation is pending.
(b) Revesting of assets
Effective as of the date of appointment of the
Corporation as receiver, the assets of a covered
financial company shall, to the extent they have
vested in any entity other than the covered fi-
nancial company as a result of any case or pro-
ceeding commenced with respect to the covered
financial company under the Bankruptcy Code,
the Securities Investor Protection Act of 1970 (15
U.S.C. 78aaa et seq.), or any similar provision of
State liquidation or insolvency law applicable to
the covered financial company, revest in the
covered financial company.
(c) Limitation
Notwithstanding subsections (a) and (b), any
order entered or other relief granted by a bank-
ruptcy court prior to the date of appointment of
the Corporation as receiver shall continue with
the same validity as if an orderly liquidation
had not been commenced.
(Pub. L. 111–203, title II, § 208, July 21, 2010, 124
Stat. 1459.)
Editorial Notes
REFERENCES IN TEXT
The Securities Investor Protection Act of 1970, re-
ferred to in subsecs. (a) and (b), is Pub. L. 91–598, Dec.
30, 1970, 84 Stat. 1636, which is classified generally to
chapter 2B–1 (§ 78aaa et seq.) of Title 15, Commerce and
Trade. For complete classification of this Act to the
Code, see section 78aaa of Title 15 and Tables.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE
Section effective 1 day after July 21, 2010, except as
otherwise provided, see section 4 of Pub. L. 111–203, set
out as
Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 5389
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.