Reorganization by Commissioner

As a condition to restoration of possession and resumption of business pursuant to Section 141107 of this act, the commissioner may require an association, the business, property and assets of which are in his possession, to adopt and agree to carry out a plan of reorganization proposed by the commissioner. A. Proposal of Plan. The commissioner, upon proposing a plan of reorganization pursuant to this section, shall file such plan in his office and shall fix a time and place for a hearing before him on such plan, and shall give at least 30 day’s notice to investors and creditors of such hearing, which notice shall include a copy or summary of such plan. Such hearing shall be held in the municipality in which such association maintains its principal office. B. Hearing. At the time and place fixed for such hearing, or at the time and place to which such hearing may be continued by the commissioner, the commissioner shall hear the parties interested therein and, if he deems it necessary, may take testimony and/or may receive depositions relative thereto. If at the time fixed for Such hearing written dissents from such plan (other than dissents, if any, withdrawn after the filing thereof) shall have been filed by holders or more than one-third in value of the investment certificates of such association then outstanding, or by holders of more than one-third in value of the shares of such association then outstanding, or by holders of more than one-half of the stock of such association then outstanding, then such hearing shall not be held, such plan shall COL120106 CH. 146 REORGANIZATION not be approved by the commissioner, and no further proceedings shall be taken in respect of such plan. After the completion of such hearing the commissioner shall approve or disapprove such plan, and it he disapproves such plan he may modify such plan and propose it as modified or propose a different plan. If he proposes such plan as modified or a different plan, the provisions of this section (including among other provisions, the provisions of Subsections A and B thereof) shall apply to such modified or different plan in same manner and with the same effect as if it had been the original plan proposed by the commissioner. Notwithstanding anything to the contrary contained in this Subsection B, dissents of shareholders shall have no effect if the value of the assets of such association shall be less than the liabilities of such association, including the value of its investment certificates but not including the value of its shares; and dissents of stockholders shall have no effect if the value of the assets of such association shall be less than the liabilities thereof, including the value of all outstanding shares and investment certificates. C. Conditions of Approval. No plan shall be approved by the commissioner unless he is satisfied that the plan is fair and equitable, and feasible. D. Effect of Approval. When any plan under this section shall have been approved by the commissioner, such plan shall be binding upon the commissioner, such association and all of the investors and creditors of such association, other than investors and creditors who shall have filed with the commissioner written dissents from such plan within the time specified in Subsection B of this section and shall not have withdrawn such dissents. Thereupon such steps shall be taken by the commissioner, such association and all other persons affected by such plan, and all acts shall be done, all instruments executed and all securities issued, as may be required by such plan so approved and as may be necessary or desirable for the consummation of such plan. The commissioner shall supervise and direct the consummation of such plan. E. Rights of Dissenters. No investor or creditor who shall have filed with the commissioner his written dissent from such plan COL120106 CH. 146 REORGANIZATION within the time specified in Subsection B of this section, shall be entitled to receive any securities or other participation under such plan (except from payments to the commissioner pursuant to provisions of the plan referred to in the next paragraph) unless such dissent shall be withdrawn, but the commissioner shall set apart and shall thereafter liquidate for such dissenters that part of the assets of such association which in value shall bear the same proportion to all of the assets of such association (due provision being made for any liens, charges, liabilities and expenses entitled to payment in preference to certificate holders and unsecured creditors) as the value of investment certificates in respect of which dissents have been duly filed plus the amount of claims of unsecured creditors in respect of which dissents shall have been duly filed bears to the total sum of the value of all investment certificates of such association plus the amount of all unsecured creditor’s claims against such association (such proportion being hereinafter referred to as the "proportion of dissenting certificate holders and, unsecured creditors"); provided, that in all cases the assets so set apart for liquidation shall be of such amount and value that the probable result of the liquidation of such assets for the benefit of the dissenting investors and creditors and of any payments to the commissioner pursuant to the provisions of the plan referred to in the next paragraph shall be not less favorable to the dissenting investors and creditors than the probable result of a liquidation, in the absence of a plan, of all the assets for the benefit of all investors and creditors. It is recognized that the proportion of dissenting certificate holders and unsecured creditors may not be the same proportion which the value of shares in respect of which dissents have been duly filed bears to the total value of all shares of such association (hereinafter referred to as the "proportion of dissenting shareholders") or as the proportion which the value of stock in respect of which dissents have been duly filed bears to the total stock of such association (hereinafter referred to as the "proportion of dissenting stockholders"). Accordingly any plan approved under this section shall provide that if the liquidation of assets set apart pursuant to this Subsection E shall result in the distribution to dissenting certificate holders and unsecured creditors of the full amounts to which they are entitled and leave additional amounts COL120106 CH. 146 REORGANIZATION available for distribution to shareholders or stockholders such additional amounts shall be either

(a)increased (in the event the proportion of dissenting shareholders or the proportion of dissenting stockholders shall be greater than the proportion of dissenting certificate holders and unsecured creditors) by payments from the association, or from a corporation or trustee to whom assets of such association are to be transferred pursuant to such plan to the commissioner for distribution to dissenting shareholders or dissenting stockholders or

(b)decreased (in the event the proportion of dissenting shareholders or the proportion of dissenting stockholders shall be less than the proportion of dissenting certificate holders and unsecured creditors), by payments from the commissioner to the association, or to a corporation or trustee to whom assets of such association are to be transferred pursuant to such plan. In either case the amounts to be so paid shall be determined by the amounts available for distribution to shareholders or stockholders, respectively, as the result of liquidation by the commissioner of the assets set apart pursuant to this Subsection E and shall be such as to overcome any inequity which would exist in the absence of such payment by reason of the differences between the proportion of dissenting certificate holders and unsecured creditors, the proportion of dissenting shareholders, and the proportion of dissenting Stockholders. Upon approving a plan of reorganization the commissioner shall determine what assets shall be set apart pursuant to this Subsection E and shall cause a written statement of such determination including a description of the properties to be so set apart, to be filed in his office. Thereupon the commissioner shall cause notice of the fact that he has made such determination (which notice shall include in general terms a statement of the properties to be so set apart) to be given as follows: Such notice shall be posted in three public places in the territory in which such association maintains its office, shall be published at least once in a newspaper of general circulation, and shall be mailed to all investors and creditors whose respective addresses appear on the books of such association. F. Action in District Court. Within 30 days after such notice shall have been posted, published and mailed as aforesaid any investor or creditor may apply to the District Court of the territory COL120106 CH. 146 REORGANIZATION of Guam for a determination as to whether the assets set apart pursuant to Subsection E of this section are sufficient in amount and value to conform to the" requirement of such subsection. Thereafter such application or applications shall be sent for hearing. At least 30 day’s notice of such hearing shall be given by posting in three public places in said territory, and, if the court shall so require, notice shall also be given by publication and/or mailing at such time or times and in such manner as the court shall prescribe. At such hearing the written statement of the commissioner of his determination as to the assets to be set apart shall be received and shall be prima facie evidence of the correctness of such determination, but the commissioner, the association and any investor or creditor (whether or not dissenting) may introduce evidence in support or in opposition to the commissioner’s determination. After the conclusion of such hearing the court shall make its order either approving or disapproving such determination by the commissioner, and if the court shall disapprove such determination, the court shall determine and specify in such order the assets to be set apart pursuant to Subsection E of this section. G. Appeals. No appeal from such order of court shall stay or postpone the consummation of the plan, unless such court shall deem it necessary to delay such consummation for the proper protection of the appellant or appellants, but in lieu of requiring the consummation of the plan to be delayed such court may restrain the sale, transfer or other disposition by the commissioner, the association or a corporation or trustee to whom assets are to be transferred of any assets specified by the court, if the retention of such assets is found by the court necessary or advisable to protect the rights of the appellant or appellants.