7-2-9. Conservatorship, receivership, or liquidation of institution -- Appointment
of receiver -- Review of actions.
(1) Upon taking possession of the institution, the commissioner may appoint a receiver to
perform the duties of the commissioner. Subject to any limitations, conditions, or requirements
specified by the commissioner and approved by the court, a receiver shall have all the powers and
duties of the commissioner under this chapter and the laws of this state to act as a conservator,
receiver, or liquidator of the institution. Actions of the commissioner in appointing a receiver
shall be subject to review only as provided in Section 7-2-2.
(2) (a) If the deposits of the institution are to any extent insured by a federal deposit
insurance agency, the commissioner may appoint that agency as receiver. After receiving notice
in writing of the acceptance of the appointment, the commissioner shall file a certificate of
appointment in the commissioner's office and with the clerk of the district court. After the filing
of the certificate, the possession of all assets, business, and property of the institution is
considered transferred from the institution and the commissioner to the agency, and title to all
assets, business, and property of the institution is vested in the agency without the execution of
any instruments of conveyance, assignment, transfer, or endorsement.
(b) If a federal deposit insurance agency accepts an appointment as receiver, it has all the
powers and privileges provided by the laws of this state and the United States with respect to the
conservatorship, receivership, or liquidation of an institution and the rights of its depositors, and
other creditors, including authority to make an agreement for the purchase of assets and
assumption of deposit and other liabilities by another depository institution or take other action
authorized by Title 12 of the United States Code to maintain the stability of the banking system.
Such action by a federal deposit insurance agency may be taken upon approval by the court, with
or without prior notice. Such actions or agreements may be disapproved, amended, or rescinded
only upon a finding by the court that the decisions or actions of the receiver are arbitrary,
capricious, fraudulent, or contrary to law. In the event of any conflict between state and federal
law, including provisions for adjudicating claims against the institution or receiver, the receiver
shall comply with the federal law and any resulting violation of state law shall not by itself
constitute grounds for the court to disapprove the actions of the receiver or impose any penalty
for such violation.
(c) The commissioner or any receiver appointed by him shall possess all the rights and
claims of the institution against any person whose breach of fiduciary duty or violations of the
laws of this state or the United States applicable to depository institutions may have caused or
contributed to a condition which resulted in any loss incurred by the institution or to its assets in
the possession of the commissioner or receiver. As used in this Subsection (2)(c), fiduciary duty
includes those duties and standards applicable under statutes and laws of this state and the United
States to a director, officer, or other party employed by or rendering professional services to a
depository institution whose deposits are insured by a federal deposit insurance agency. Upon
taking possession of an institution, no person other than the commissioner or receiver shall have
standing to assert any such right or claim of the institution, including its depositors, creditors, or
shareholders unless the right or claim has been abandoned by the commissioner or receiver with
approval of the court. Any judgment based on the rights and claims of the commissioner or
receiver shall have priority in payment from the assets of the judgment debtors.
(d) For the purposes of this section, the term "federal deposit insurance agency" shall
include the Federal Deposit Insurance Corporation, the National Credit Union Administration
and any departments thereof or successors thereto, and any other federal agency authorized by
federal law to act as a conservator, receiver, and liquidator of a federally insured depository
institution, including the Resolution Trust Corporation and any department thereof or successor
thereto.
(3) The receiver may employ assistants, agents, accountants, and legal counsel. If the
receiver is not a federal deposit insurance agency, the compensation to be paid such assistants,
agents, accountants, and legal counsel shall be approved by the commissioner. All expenses
incident to the receivership shall be paid out of the assets of the institution. If a receiver is not a
federal deposit insurance agency, the receiver and any assistants and agents shall provide bond or
other security specified by the commissioner and approved by the court for the faithful discharge
of all duties and responsibilities in connection with the receivership including the accounting for
money received and paid. The cost of the bond shall be paid from the assets of the institution.
Suit may be maintained on the bond by the commissioner or by any person injured by a breach of
the condition of the bond.
(4) (a) Upon the appointment of a receiver for an institution in possession pursuant to
this chapter, the commissioner and the department are exempt from liability or damages for any
act or omission of any receiver appointed pursuant to this section.
(b) This section does not limit the right of the commissioner to prescribe and enforce
rules regulating a receiver in carrying out its duties with respect to an institution subject to the
jurisdiction of the department.
(c) Any act or omission of the commissioner or of any federal deposit insurance agency
as a receiver appointed by him while acting pursuant to this chapter shall be deemed to be the
exercise of a discretionary function within the meaning of Section 63G-7-301 of the laws of this
state or Section 28 U.S.C. 2680(a) of the laws of the United States.
(5) Actions, decisions, or agreements of a receiver under this chapter, other than
allowance or disallowance of claims under Section 7-2-6, shall be subject to judicial review only
as follows:
(a) A petition for review shall be filed with the court having jurisdiction under Section
7-2-2 not more than 90 days after the date the act, decision, or agreement became effective or its
terms are filed with the court.
(b) The petition shall state in simple, concise, and direct terms the facts and principles of
law upon which the petitioner claims the act, decision, or agreement of the receiver was or would
be arbitrary, capricious, fraudulent, or contrary to law and how the petitioner is or may be
damaged thereby. The court shall dismiss any petition which fails to allege that the petitioner
would be directly injured or damaged by the act, decision, or agreement which is the subject of
the petition. Rule 11 of the Utah Rules of Civil Procedure shall apply to all parties with respect
to the allegations set forth in a petition or response.
(c) The receiver shall have 30 days after service of the petition within which to respond.
(d) All further proceedings are to be conducted in accordance with the Utah Rules of
Civil Procedure.
(6) All notices required under this section shall be made in accordance with the Utah
Rules of Civil Procedure and served upon the attorney general of the state of Utah, the
commissioner of financial institutions, the receiver of the institution appointed under this
chapter, and upon the designated representative of any party in interest who requests in writing
such notice.
Amended by Chapter 382, 2008 General Session
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Last revised: Thursday, May 28, 2009