(1) its capital is impaired or it is otherwise in an unsound condition;

(2) its business is being conducted in an unlawful or unsound manner;

(3) it is unable to continue normal operations; or

(4) its examination has been obstructed or impeded.

(b) The Commissioner shall take possession by posting upon the premises a notice reciting that the Commissioner is assuming possession pursuant to this Act, and the time, not earlier than the posting of the notice, when the Commissioner’s possession shall be deemed to commence. A copy of the notice shall be filed in the U.S. District Court of Guam. The Commissioner shall notify the trustor of all the trusts under the management of the Trust Company.

(c) When the Commissioner has taken possession of a Trust Company, the Commissioner shall be vested with the full and exclusive power of management and control, including the power to continue or to discontinue the business, to stop or to limit the payment of its obligations, to employ any necessary assistants, to execute any instrument in the name of the Trust Company, to commence, defend and conduct in its name any action or proceeding in which it may be a party, to terminate the Commissioner’s possession by restoring the Trust Company to its board of directors and to reorganize or liquidate the Trust Company in accordance with this Act. As soon as practicable after taking possession, the Commissioner shall make an inventory of the assets and file a copy thereof with the U.S. District Court of Guam.

COL4122017
11 Guam Code Ann. FINANCE & TAXATION
CH. 160 GUAM-BASED TRUST COMPANIES ACT

(d) When the Commissioner has taken possession there shall be a postponement until six (6) months after the commencement of such possession of the date upon which any period of limitation fixed by a statute or agreement would otherwise expire on a claim or right of action of the Trust Company, or upon which an appeal must be taken or a pleading or other document must be filed by the Trust Company in any pending action or proceeding.

(e) If, in the opinion of the Commissioner, an emergency exists which will result in serious losses to the trustors and creditors, the Commissioner may take possession of the Trust Company without a prior hearing. Within ten (10) days after the Commissioner has taken possession, any interested party may file an application with the U.S. District Court of Guam for an order vacating such possession. The U.S. District Court of Guam shall grant the application if it finds that the action of the Commissioner was unauthorized under this Act.

(f) If the Commissioner shall determine to liquidate the Trust Company, the Commissioner shall give such notice of the Commissioner’s determination to the directors, stockholders and the trustors. Any objection to the liquidation shall be filed with the U.S. District Court of Guam within thirty (30) days after such notice. Unless within thirty (30) days thereafter, the U.S. District Court of Guam issues an order staying the liquidation, the Commissioner shall proceed to liquidate the Trust Company.

(g) If the Commissioner determines to reorganize the Trust Company, or the U.S. District Court of Guam, after staying its liquidation, orders such reorganization, the Commissioner, after according a hearing to all interested parties, shall propose a reorganization plan. A copy of the Plan shall be sent to each trustor and creditor who will not receive payment of the Commissioner’s claim in full under the Plan, together with notice. Unless within thirty (30) days the Plan is disapproved in writing by persons holding one-third (1/3) or more of the aggregate amount of such claims, the Commissioner will proceed to effect the reorganization. A department or agency of the government of Guam holding a claim which will not be paid in full is authorized to participate as any other creditor.

(h) No judgment, lien or attachment shall be executed upon any asset of the Trust Company while it is in the possession of the

COL4122017
11 Guam Code Ann. FINANCE & TAXATION
CH. 160 GUAM-BASED TRUST COMPANIES ACT

Commissioner. Upon the election of the Commissioner in connection with a liquidation or reorganization:

(1) any lien or attachment, other than a mechanic=s lien, obtained upon any asset of the Trust Company during the Commissioner=s possession or within four (4) months prior to commencement thereof, shall be vacated, except liens created by the Commissioner while in possession; and

(2) Any transfer of an asset of the Trust Company made after or in contemplation of its insolvency with intent to effect a preference shall be voided.

(i) With the approval of the U.S. District Court of Guam, the Commissioner may borrow money in the name of the Trust Company and may pledge its assets as security for the loan.

(j) All necessary and reasonable expenses of the Commissioner=s possession of a Trust Company and of its reorganization or liquidation shall be defrayed from the assets thereof.