N.Y. Banking Law § 219: Unissued securities and reorganization

§ 219. Unissued securities and reorganization. 1. The holders of

capital stock of such corporation shall not, as such, have any

preemptive or preferential right to purchase or subscribe for any part

of the unissued or new issue of capital stock of such corporation,

whether now or hereafter authorized or issued, or to purchase or

subscribe for any bonds or other obligations, whether or not convertible

into stock of such corporation, now or hereafter authorized or issued.

2. Whenever a compromise or arrangement or any plan of reorganization

of such corporation is proposed between such corporation and its

creditors, members or stockholders, the supreme court, by virtue of its

general equity powers may, on application of such corporation or of any

creditor, member or stockholder thereof, or on the application of any

receiver or receivers appointed for such corporation, order a meeting of

such creditors, members or stockholders, as the case may be, as may be

affected by the proposed compromise or arrangement or plan of

reorganization, which shall be called in such manner as the said court

directs. If, at such meeting, such compromise or arrangement or plan of

reorganization is agreed to by or on behalf of the creditors, if

affected thereby, holding two-thirds in amount of the claims against

such corporation, and by or on behalf of the stockholders, if affected

thereby, holding the majority of capital stock, and by or on behalf of

the members, if affected thereby, holding two-thirds in amount of the

outstanding notes or other interest-bearing obligations of such

corporation as provided for in section two hundred fifteen of this

chapter, and if such agreement shall be further evidenced by the written

acceptance of said creditors, stockholders and members, duly filed in

the said court, such compromise or arrangement or plan of reorganization

shall, if approved by the said court as just and equitable, be binding

on all creditors, stockholders or members, as the case may be, who are

affected thereby, and also on such corporation. All persons who become

creditors, stockholders or members of such corporation shall be deemed

to have become creditors, stockholders or members subject in all

respects to this section, and the same shall be absolutely binding upon

them. For the purposes of this subdivision only, members shall not be

deemed to be creditors and shall act under this subdivision as a

separate class.