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Banking Interpretations

NYSBL 143-b


January 8, 1985

To: Examiner Zanko

From: Assistant Counsel Barras

Re: [ ] -- Possible Control Application

The facts in this case indicate that four indi- viduals are proposing to make a tender offer for the subject bank. Apparently, this would be the first hostile takeover since Section 143-b was amended by Chapter 793 of the Laws of 1980. After considering the issues involved, I suggest that you advise the tenderors as follows:

  1. In view of the fact that Section 143-b mandates that the approval of the Banking Board be obtained before any company (defined in Section 141(2) to include an individual or combination of individuals) acquires control of a banking institution, the company in the instant case should structure its tender offer so that it has not legally acquired more than 10% of the voting stock before such approval is obtained. This could be accomplished by conditioning the tender offer not only on the acquisition of a certain percentage of shares but also on the acquisition of the required Banking Board approval.
  2. You indicated that [ ], one of the tenderors, currently owns over 50% of the [ ] National Bank. Therefore, if [ ] also "controlled" [ ] Bank, he would be a "bank holding company" under Section 141(3). Consequently, [ ] should file a separate application under Section 142. However, I see no need to require that 2 investigation fees be paid because only 1 trans- action is really involved here.
  3. You may also wish to advise [ ] of the provisions of Section 143(3)(a) wherein It would be illegal for him to serve as executive officer of the bank holding company and as executive officer of a bank or national bank without Banking Board approval.

S. R. B.

Department of Financial Services


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