N.Y. Banking Law § 615: On taking possession, superintendent shall notify those holding assets; effect of notification; turnover of assets and payment of debts o...

§ 615. On taking possession, superintendent shall notify those holding

assets; effect of notification; turnover of assets and payment of debts

owed to the banking organization. When the superintendent shall take

possession of the property and business of any banking organization:

1. The superintendent shall forthwith give notice of such fact to all

corporations, unincorporated associations, partnerships, governmental

entities and other entities and individuals known to him to hold any

assets of such banking organization. No corporation, unincorporated

association, partnership, governmental entity or other entity or

individual having notice or knowledge that the superintendent has taken

possession of such banking organization, shall have a lien or charge for

any payment, advance or clearance thereafter made against any of the

assets of such banking organization for liability thereafter incurred.

2. Upon the written demand of the superintendent, any corporation,

unincorporated association, partnership, governmental entity or other

entity or individual holding assets of such banking organization shall

deliver such assets to the superintendent and shall thereupon be

discharged from liability with respect to any claim upon such assets;

provided, however that such demand shall not affect the right of a

secured creditor with a perfected security interest, or other valid lien

or security interest enforceable against third parties, to retain

collateral, including any right of such secured creditor under any

security arrangement related to a qualified financial contract, as

defined in section six hundred eighteen-a of this article to retain

collateral and apply such collateral in accordance with paragraph (d) of

subdivision two of section six hundred eighteen-a of this article.

Nothing in this section shall affect any right of setoff permitted under

applicable law; provided, however, that in connection with the

liquidation of a branch or agency of a foreign banking corporation

pursuant to this article, no entity or individual may set off the

business and property in this state of such foreign banking corporation

described in subparagraph one of paragraph (c) of subdivision four of

section six hundred six of this article against liabilities of such

foreign banking corporation other than those that arise out of

transactions had by such entity or individual with such branch or agency

(which liabilities shall be deemed to include in the case of qualified

financial contracts the lesser of the two amounts calculated with

respect to any such qualified financial contract pursuant to paragraph

(c) of subdivision two of section six hundred eighteen-a of this

article) and provided that such setoff is otherwise permissible under

applicable law.