N.Y. Banking Law § 323: Assessment of stockholders to make good impairment of capital; sale of stock

§ 323. Assessment of stockholders to make good impairment of capital;

sale of stock.

Whenever the superintendent shall have made requisition upon any safe

deposit company pursuant to the provisions of article two of this

chapter to make good the amount of an impairment of its capital, the

directors of the safe deposit company shall immediately give notice of

such requisition to each stockholder of the amount of the assessment

which he must pay for the purpose of making good such deficiency, by a

written or printed notice mailed to such stockholder at his place of

residence, or served personally upon him. If any stockholder shall

refuse or neglect to pay the assessment specified in such notice within

sixty days from the date thereof, the directors of such safe deposit

company shall have the right to sell to the highest bidder at public

auction the stock of such stockholder, after giving previous notice of

such sale once a week for two successive weeks in a newspaper of general

circulation in the county where the principal office of such safe

deposit company is located; or such stock may be sold at private sale,

and without such published notice, provided, however, that before making

a private sale thereof an offer in writing to purchase such stock shall

first be obtained, and a copy thereof served upon the owner of record of

the stock sought to be sold either personally or by mailing a copy of

such offer to such owner at his place of residence or the address

furnished by him to the safe deposit company; and if, after service of

such offer, such owner shall still refuse or neglect to pay such

assessment within two weeks from the time of service of such offer, the

said directors may accept such offer and sell such stock to the person

or persons making such offer, or to any other person or persons making a

larger offer than the amount named in the offer submitted to such

stockholder; but said stock shall in no event be sold for a smaller sum

than the amount of the assessment called for and the necessary costs of

sale. Out of the avails of the stock sold the directors shall pay the

necessary costs of sale and the amount of the assessment called for

thereon. The balance, if any, shall be paid to the person or persons

whose stock has been thus sold. A sale of stock as herein provided shall

effect an absolute cancellation of the outstanding certificate or

certificates evidencing the stock so sold, and shall render the same

null and void and a new certificate or certificates shall be issued to

the purchaser or purchasers of said stock.