(a) The receiver is authorized to borrow money and pledge the assets of a bank in liquidation for protecting and preserving its assets, for paying secured claims, for aiding in the reorganization or reopening of such bank or for making distribution to depositors and creditors when, in the judgment of the receiver, the borrowing of such funds would be to the interest of the depositors and creditors.
Terms Used In Alabama Code 5-8A-33
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Contract: A legal written agreement that becomes binding when signed.
Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
(b) For any loan negotiated under the authority vested by this article, the receiver may execute a note therefor, renew the same from time to time and do all things he considers necessary until the same has been paid. Such note or renewal or any mortgage or contract to be executed for the purpose hereof shall be signed by giving the name of the bank, followed by the words: “In liquidation,” “By ________ (the name of the receiver) receiver.” Any note or other contract executed for the purpose hereof shall be treated as the obligation of the bank and the holder thereof shall have the character of a creditor of the bank for the amount of any deficiency in the security furnished.(c) To secure any such loan, the receiver may pledge, mortgage, or grant a security interest in, by appropriate contracts or writings, any or all of the assets, real or personal, in his possession belonging to the bank for whose benefit the loan shall be obtained.(d) Before closing the proposal to procure the loan, pledge, mortgage, or grant of a security interest in assets under subsections (a) and (c), the same shall be presented to the receivership court by petition, giving the court full information concerning desirability of making the loan and granting a security and such other matters as the receiver may desire, and the court may pass upon such petition with or without notice to the former directors or chief executive officer of the bank involved or to other parties in interest.
