Or. Admin. R. 410-141-5370

Current through Register Vol. 63, No. 6, June 1, 2024

Section 410-141-5370 - CCO INSOLVENCY AND DISSOLUTION: Recovery From Parent Corporation Or Holding Company In The Event Of Liquidation Or Rehabilitation

(1) If an order for liquidation or rehabilitation of a CCO has been entered, the receiver appointed under the order may recover, on behalf of the CCO, from any parent corporation or holding company or person or affiliate who otherwise controlled the CCO, the amount of distributions, other than distributions of shares of the same class of stock, paid by the CCO on the CCO's capital stock, or any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the CCO or the CCO's subsidiary to a director, officer or employee, when such a distribution or payment is made at any time during the 12 calendar months preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of subsections (2), (3) and (4) of this section.

(2) A distribution to which subsection (1) of this section applies is not recoverable if the parent or affiliate shows that the distribution was lawful and reasonable when paid and that the CCO did not know and could not reasonably have known that the distribution might adversely affect the ability of the CCO to fulfill the CCO's contractual obligations.

(3) Any person who was a parent corporation or holding company or a person who otherwise controlled the CCO or affiliate at the time a distribution to which subsection (1) of this section applies was paid is liable in an amount that is not more than the amount of distributions or payments received by the person under subsection (1) of this section. Any person who otherwise controlled the CCO at the time such distributions were declared is liable up to the amount of distributions the person would have received if the distributions had been paid immediately. If two or more persons are liable with respect to the same distributions, the persons are jointly and severally liable.

(4) The maximum amount recoverable under this section is the amount needed in excess of all other available assets of the impaired or insolvent CCO to pay the contractual obligations of the impaired or insolvent CCO.

(5) To the extent that any person liable under subsection (3) of this section is insolvent or otherwise fails to pay claims due from the person pursuant to subsection (3) of this section, the person's parent corporation or holding company or other person who otherwise controlled the person liable under subsection (3) of this section when the distribution was paid are jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person who otherwise controlled the person liable under subsection (3) of this section.

(6) If a CCO is placed into rehabilitation or liquidation and the CCO engages in transactions within its holding company system that are subject to OAR 410-141-5320, the Authority retains jurisdiction over the CCO, any interested affiliates of the CCO and the transaction for purposes of regulation and enforcement under ORA 410-141-5320.

Or. Admin. R. 410-141-5370

DMAP 60-2019, adopt filed 12/18/2019, effective 1/1/2020

Statutory/Other Authority: ORS 413.042, 414.615, 414.625, 414.635 & 414.651

Statutes/Other Implemented: ORS 414.610 - 414.685