N.Y. Banking Law § 154: Transfer of fiduciary relationships from affiliated banks or trust companies to subsidiary trust companies

§ 154. Transfer of fiduciary relationships from affiliated banks or

trust companies to subsidiary trust companies. 1. (a) At any time or

times after the issuance to it by the superintendent of the

authorization certificate specified in article two of this chapter, a

subsidiary trust company may apply by verified petition to the supreme

court, special term, in and for the county in which its principal office

is located requesting that it be substituted for each of its affiliated

banks or trust companies specified in the petition (i) in every existing

fiduciary capacity designated therein and (ii) in the case of the first

such petition, in every fiduciary capacity which may take effect after

the date of the hearing provided for below. Each such specified

affiliated bank or trust company shall join in such petition. Notice of

the filing of such petition shall be given prior to the filing thereof

to the superintendent.

(b) Such petition shall indicate the county wherein the principal

office of each affiliated bank or trust company joining in the petition

is located and shall designate each fiduciary relationship existing at

the date thereof with respect to which such subsidiary trust company

requests substitution. Such petition shall additionally set forth, with

regard to each existing fiduciary relationship designated therein, the

name and address last known to the petitioner of each person entitled to

receive notice of hearing thereon, to wit:

(i) in the case where an affiliated bank or trust company specified in

the petition is acting with one or more cofiduciaries in respect to such

fiduciary relationship, each such cofiduciary; and

(ii) in the case where the instrument creating such fiduciary

relationship so provides, each person who, alone or together with

others, is empowered to revoke, terminate or amend such instrument or to

remove the corporate fiduciary; and

(iii) in the case of any fiduciary relationship not specified in

subparagraph (ii) of this paragraph, each beneficiary currently

receiving income and any other beneficiary interested in the income and

any person presumptively entitled to share in distributions of principal

were such fiduciary relationship terminated at the date of such

petition; and

(iv) in the case of any fiduciary relationship, including those

specified in subparagraphs (i), (ii) and (iii) of this paragraph, which

is an estate of a deceased person or which is a guardianship or

conservatorship, the clerk of the court in which such estate,

guardianship or conservatorship matter is pending, together with a

statement that a notice has been, or is being, given to the persons

specified in such subparagraphs. If any of the persons specified in

subparagraph (i), (ii) or (iii) of this paragraph is an infant or an

incompetent, such notice shall be given to the guardian or committee, as

the case may be, of his property. If any such infant, or incompetent

shall not have a guardian or committee to so represent him, or if any of

the persons specified in subparagraph (i), (ii) or (iii) of this

paragraph is incapacitated, unknown (or a person whose whereabouts are

unknown) or confined as a prisoner in a penal institution, the court

may, in its discretion, appoint one or more guardians ad litem to

represent any one or more of such persons.

2. When any petition described in subdivision one of this section

shall have been filed, the supreme court for the county where filed

shall enter an order fixing a date and time for hearing thereon, which

date shall not be less than thirty-five days after the filing of the

petition, and approving the form of notice to be given by the petitioner

as hereinafter provided. At least twenty-five days prior to the hearing

date, the petitioner shall cause a copy of such notice to be mailed by

first class mail to each person identified in the petition as being

entitled to receive notice under the provisions of this article, at such

person's address last known to the petitioner as set forth in the

petition. In addition, the petitioner shall cause a copy of such notice

to be published at least once a week for three successive weeks

preceding the hearing date, the first such publication to be at least

twenty-five days prior to the hearing date, such publication to be in a

newspaper of general circulation published in each county in which the

principal office of an affiliated bank or trust company specified in the

petition is located, or if in any case there be no such newspaper, then

in a newspaper of general circulation published in a contiguous county.

3. The notice to be mailed and published with respect to each such

petition shall state (a) the time and place of the hearing thereon, (b)

the name of the subsidiary trust company which has filed the petition,

(c) the name of each affiliated bank or trust company which has joined

in such petition, (d) that the petition requests that the subsidiary

trust company be substituted for each of its affiliated banks or trust

companies specified in the petition in every existing fiduciary capacity

designated therein and, if appropriate, in every fiduciary capacity

which may take effect after such hearing, and (e) that any person to

whom such notice is addressed may file an objection as provided in, and

in accordance with, subdivision four of this section. All costs incurred

in connection with the printing, mailing and publishing of such notice

shall be borne by the petitioner.

4. Any person entitled to receive notice under the provisions of this

article may, as to the fiduciary relationship by which he is affected,

object to the substitution of the subsidiary trust company as fiduciary.

Any such person wishing to so object must file a written objection to

such substitution, setting forth the reasons therefor, with the clerk of

the court in which the hearing is to be held, and serve a copy thereof

upon the attorney for the petitioner, at least three days before the

date of hearing and must appear at such hearing in person or by

attorney.

5. On the date fixed for the hearing on such petition, upon making a

determination that notice has been properly given as required by this

section, the said supreme court shall enter an order substituting the

subsidiary trust company for each of its specified affiliated banks or

trust companies in every designated existing fiduciary capacity and, in

the case of the first petition by the petitioner, in every fiduciary

capacity which may take effect thereafter, excepting fiduciary

capacities in any existing relationship with respect to which an

objection has been filed pursuant to and in accordance with subdivision

four of this section; provided, that in the case of a fiduciary

relationship where more than one person would be entitled under this

article to object to substitution of the subsidiary trust company, the

properly made objection by less than all of such persons shall be

considered by the court which shall, in its sole discretion, determine

whether such substitution shall be so ordered. In the case of a

fiduciary relationship in which an objection has been properly made by

any person who is entitled pursuant to this article to object to such

substitution, the court may, in its discretion, determine that the

resignation of the affiliated bank or trust company will be accepted in

respect of such fiduciary relationship; if the court shall determine

that such resignation will be accepted, it shall enter an order

substituting a different banking institution or subsidiary trust

company, which shall have given its written consent to such substitution

prior to the entry of such order. In construing the language of any

instrument which is the subject of a proceeding pursuant to this

article, nothing contained herein shall be considered to abrogate or

affect the intent or written language of the instrument creating the

fiduciary relationship. Upon entry of the court's order, the subsidiary

trust company shall, without further act, be substituted in every such

fiduciary capacity.

6. In respect of each fiduciary capacity, existing and future, as to

which substitution has been ordered pursuant to this article, each

designation of a petitioning affiliated bank or trust company as

fiduciary in any capacity contained in any contract, will or other

document or instrument shall be deemed a designation of the subsidiary

trust company substituted for such bank or trust company pursuant to

this section. Any grant in any such contract, will or other document or

instrument of any rights, powers, duties or authorities, whether or not

discretionary, shall be deemed conferred upon the subsidiary trust

company deemed designated as the fiduciary pursuant to this section.

7. Upon substitution pursuant to this section, each affiliated bank or

trust company shall deliver to the subsidiary trust company all assets

held by such trust company as fiduciary (except assets held in

capacities with respect to which there has been no substitution pursuant

to this section) and upon such substitution all such assets shall become

the property of the subsidiary trust company without the necessity of

any instrument of transfer or conveyance. A trust company shall account,

in respect of each of its existing fiduciary relationships designated in

the petition and as to which a substitution has been ordered under this

section, for that portion of the accounting period in which such

substitution was ordered ending on the date of such order; thereafter

the subsidiary trust company which has been substituted as fiduciary for

such bank or trust company shall account in respect of each such

fiduciary relationship. Notwithstanding any provision in this chapter to

the contrary, after a substitution of existing fiduciary capacities

pursuant to this article, an affiliated bank or trust company shall

remain jointly liable with the subsidiary trust company which has been

substituted for it in respect of each of the existing fiduciary

relationships as to which such substitution has been ordered, but such

affiliated bank or trust company shall be entitled to a right of

subrogation against such subsidiary trust company for all amounts paid

by such affiliated bank or trust company as a result of such joint

liability.