Twenty States and the federal government now have laws permitting the reorganization and reopening of insolvent or failing banks. The usual statute provides for the reorganization of a bank upon some plan approved by a large majority of the general creditors of the institution; the plan must also have the approval of state banking officials and of a court of general jurisdiction, although the last is by no means a universal requirement. The reorganization, when approved, becomes binding upon all depositors and general creditors of the bank regardless of consent. By the terms of a few statutes, non-assenting creditors are entitled to have a proportionate share of the assets set aside for liquidation under the ordinary procedure.
Maurice S. Culp,
CONSTITUTIONAL LAW - BANK REORGANIZATION LEGISLATION - COMPOSITION WITH DEPOSITORS AND OTHER CREDITORS,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol32/iss2/4