{"data":{"id":"us-ky/krs-286.3-115","jurisdiction":"us-ky","citation":"KRS 286.3-115","heading":"Capital notes and debentures may be issued -- Conditions.","body":"(1) With the approval of the commissioner a bank or trust company may, at any time,\nby resolution of its board of directors, which resolution shall have been approved at\na stockholders' meeting by two -thirds (2/3) of the outstanding capital stock of the\nbank, issue and sell its capital notes or debentures in an amount not in excess of one\nhundred percent (100%) of its unimpaired paid -in capital stock plus fifty percent\n(50%) of its unimpaired surplus. The aggregate amount of such capital notes or\ndebentures iss ued or sold by a bank or trust company shall be exempt from the\nlimitations and restrictions on indebtedness, as may be provided in its articles of\nincorporation.\n(2) Such capital notes and debentures shall be subordinate to the claims of creditors and\ndepositors, and shall be provided in any such capital notes or debentures that in the\nevent of liquidation all depositors and other creditors of the bank shall be entitled to\nbe paid in full, with such interest as may be provided by law, before any payment\nshall be made on account of principal of or interest on said capital notes or\ndebentures, and may provide that after payment in full of all sums owing to such\ndepositors and creditors the holders of such capital notes shall be entitled to be paid\nfrom the re maining assets of the bank, the unpaid principal amount of the capital\nnotes or debentures, plus accrued and unpaid interest thereon, before any payment\nor other distribution, whether in cash, property or otherwise, shall be made on\naccount of any capital stock of the bank.\n(3) The capital notes or debentures shall in no case be subject to any assessment. The\nholders of such capital notes or debentures shall not be liable for any debts,\ncontracts, or engagements of such bank, nor for assessments to restore impairments\nin the capital of such bank, unless the holder is a stockholder in such bank.\n(4) Such capital notes or debentures issued or sold by a bank or trust company shall be\nconsidered as a portion of the capital and unimpaired surplus or capital struc ture of\nthe issuing bank or trust company and shall be considered as such in determining\nthe bank's legal lending or investment limits, and for other purposes, when based\nupon the capital and unimpaired surplus of the bank or trust company; except that\nsuch capital notes and debentures shall not be considered in determining the amount\nof ad valorem taxes payable by the bank or trust company.\n(5) No such capital notes or debentures may be retired or paid by the bank or trust\ncompany if at the time of retirem ent or payment or immediately after, there be an\nexisting deficiency of the bank's or trust company's capital stock, as determined by\nthe commissioner.\n(6) No such capital notes or debentures shall be issued or sold by a bank or trust\ncompany except for ca sh, and no bank or trust company which issues such capital\nnotes or debentures shall acquire or hold any of its capital notes or debentures in its\nown assets or in fiduciary capacity. Any of its own notes or debentures acquired by\na bank contrary to the pr ovisions of this section shall be forthwith disposed of by\nsale or charged to its undivided profits account.\n(7) Wherever the terms \"capital,\" \"capital stock,\" or \"capital structure\" are used in this\nsection, they shall be construed to have reference only to capital actually paid in and\ncapital stock actually issued.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=14538","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:10Z","sha256":"877571ddab74cf65f20454d5d600a05781ab7cb04ae90157d6b09c69706fc75a","source_id":"us-ky","stale":false,"prev":"us-ky/krs-286.3-110","next":"us-ky/krs-286.3-135"},"notice":"GroundRules: Original legal text. Not legal advice."}