Priorities and Value

In any plan proposed pursuant to Section 146102 due consideration shall be given to the rights and interests of all persons affected thereby (with due regard to the feasibility of such plan and the condition of such association), in the following order of priorities: First, secured creditors and other persons, if any, entitled to preference over investment certificate holders and unsecured creditors in the event of liquidation; second, investment certificate holders and unsecured creditors, without COL120106 CH. 146 REORGANIZATION preference to one over the other; third, shareholders; and fourth, stockholders, provided, however, that within their respective classes hereinabove set forth there shall be no preference among investment certificate holders and shareholders based upon whether or not notice of intention to withdraw may have been filed or matured, or the order in which any such notice may have been filed or matured; provided, further, that provision may be made in any such plan for the payment in full of all taxes, assessments, insurance, alterations, repairs and other operating expenses, for the payment of expenses of the commissioner in connection with such association or its property, business or assets or in connection with any application of such association under Section 141108 of this act, and for the payment of expenses in connection with such plan as authorized by this chapter; and provided further, that provision may be made in any such plan for the payment in cash full of all certificate holders, shareholders and creditors each of whose investment certificates, shares or claim is of such value, not to exceed twenty-five dollars ($25) as shall be specified in such plan. No plan which provides for the issuance of securities to holders of stock shall be approved unless such securities contain express provision that no interest, dividends or other distribution shall be paid or made thereon unless and until all securities issued in exchange for claims of investment certificate holders, claims of unsecured creditors, and claims of shareholders, if any, have been retired; it being the intent that under such plan each investment certificate holder and unsecured creditor (except those who shall sell or otherwise dispose of their new securities) shall receive the full amount of their original investment, with interest, dividends, or other return thereon before any interest, dividends or other distribution is paid or made on securities issued to shareholders or stockholders, or both, as aforesaid. A plan may provide, however, for the issuance of such securities to the stockholders that after all creditors, certificate holders and shareholders (except those who shall sell or otherwise dispose of their new securities) shall receive the full amount of their original investment of claims, with interest, dividends or other return thereon, the stockholders or their assigns shall own in effect, through their ownership of such securities issued to the stockholders, the remaining assets. Unless the court finds that the stockholders have an existing equity in the assets of the association, the securities issued to the shareholders shall contain express provision that such securities shall have no voting power until such corporation shall have retired all COL120106 CH. 146 REORGANIZATION securities issued in exchange for claims of certificate holders and unsecured creditors, and, unless the court finds that the stockholders have an existing equity in the assets, the securities issued to the stockholders shall contain express provision that such securities shall have no voting power until such corporation shall have retired all securities issued in exchange for claims of shareholders, certificate holders and unsecured creditors. For the purpose of this chapter, real property, contracts for the sale of real property, loans, and all other assets (whether like or unlike the foregoing) shall be valued at fair market value, and any assets subject to encumbrance shall be valued with due allowance for the amount of such encumbrance. In determining such fair market value, the court or the commissioner as the case may be, shall give due consideration to the earning power of the property, past, present and prospective.