HOUSE BILL No. 5343


     February 10, 2000, Introduced by Rep. Thomas and referred to the Committee on Insurance and Financial Services.


        A bill to amend 1986 PA 89, entitled

   "Michigan BIDCO act,"

   by amending section 717 (MCL 487.1717).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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           Sec. 717.  (1) If the commissioner finds that any of the

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      factors set forth in section 715(1) are true with respect to a

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      licensee and that it is necessary for the protection of the

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      interests of the licensee or for the protection of the public

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      interest that the commissioner take immediate possession of the

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      property and business of the licensee, the commissioner may

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      appoint a conservator for the licensee.  The commissioner may

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      appoint as conservator 1 of the employees of the financial insti-

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      tutions bureau of the department of  commerce  CONSUMER AND

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      INDUSTRY SERVICES or some other competent and disinterested

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      person.  The financial institutions bureau  of the department of


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      commerce  shall be reimbursed out of the assets of the

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      conservatorship for all sums expended by the bureau in connection

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      with the conservatorship as expenses.  Upon the approval of the

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      commissioner, the expenses of the conservatorship shall be paid

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      out of the assets of the licensee.  The expenses shall be a first

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      charge upon the assets and shall be fully paid before any final

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      distribution is made.

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           (2) Under the direction of the commissioner, the conservator

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      shall take possession of the books, records, and assets of the

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      licensee and shall take such action with respect to employees,

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      agents, or representatives of the licensee or any other action as

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      may be necessary to conserve the assets of the licensee or ensure

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      payment of obligations of the licensee pending further disposi-

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      tion of its business as provided by law.  At any appropriate

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      time, the commissioner may terminate the conservatorship and

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      permit the licensee to resume the transaction of its business

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      subject to the terms, conditions, restrictions, and limitations

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      the commissioner may prescribe.

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           (3) If in the opinion of the commissioner it is appropriate

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      that the licensee be liquidated, the commissioner, with the

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      attorney general representing the commissioner, may apply to the

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      circuit court for the county in which the principal office of the

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      licensee is located for the appointment of a receiver for the

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      licensee, if the commissioner determines that any of the follow-

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      ing are true:

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           (a) The licensee is insolvent.





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           (b) The licensee has suspended payment of its obligations,

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      has made an assignment for the benefit of its creditors, or has

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      admitted in writing its inability to pay its debts as they become

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      due.

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           (c) The licensee has applied for an adjudication of bank-

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      ruptcy, reorganization, arrangement, or other relief under a

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      bankruptcy, reorganization, insolvency, or moratorium law.

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           (d) A person has applied for the relief described under sub-

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      division (c) against any licensee and that licensee has by an

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      affirmative act approved of or consented to the action or the

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      relief has been granted.

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           (e) The licensee is in a condition that makes it unsafe or

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      unsound for the licensee to transact business.

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           (4) If a receiver is appointed under subsection (3), the

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      receiver shall liquidate the property and business of the

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      licensee in the manner provided for in sections  252 to 254  2401

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      TO 2403 of the banking code of  1969, Act No. 319 of the Public

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      Acts of 1969, being sections 487.552 to 487.554 of the Michigan

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      Compiled Laws  1999, MCL 487.12401 TO 487.12403, as if the

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      licensee were a bank.

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           Enacting section 1.  This amendatory act does not take

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      effect unless Senate Bill No. _____ or House Bill No. _____

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      (request no. 02983'99) of the 90th Legislature is enacted into

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      law.









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