Just a reminder that the deadline for non-public companies and banks (exclusive of S corps and mutuals) to participate in the Capital Purchase Program is Monday December 8, 2008.
Those companies and banks that applied prior to the release by the Treasury of the terms for non-public entities should check with their primary bank regulators to determine whether they need to file another application or amend the application that they filed.
The Treasury investment will be in the form of preferred stock. Companies and banks that do not have charter provisions that authorize preferred stock will need to amend their charters to create the preferred.
Generally, the Treasury expects everything to be in place within 30 days of the issuance of the Treasury approval letter. Therefore, the charter amendment needs to be approved by the shareholders and be in place at the end of the 30 day period. We are recommending that clients who file an application begin taking steps to call a shareholder meeting to amend their charters.
Consideration should be given to creating a blank check preferred which authorizes the board of directors to set the terms of the preferred at the time the preferred is issued. After shareholder approval, the board will adopt resolutions creating the Treasury preferred and then file the resolutions with the secretary of state of the state of incorporation or if a state bank, with the state banking commissioner, or if a national bank with the OCC.
For further information, please contact Tim M. Sullivan, Brian L. Goins, Michael D. Morehead or your regular Hinshaw attorney.
We hope that you and your families have a great Thanksgiving.
This alert has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship |