§2279cc Conservatorship; Liquidation; Receivership

Summary

The Corporation can only close itself down if the Farm Credit Administration Board agrees and approves a written plan. The Farm Credit Administration Board can also put the Corporation into conservatorship or receivership in the same situations covered by another law (section 2183(b)), and in addition if the Corporation cannot pay its debts when due, or if its authority to buy loans or issue or guarantee loan-backed securities is suspended. A receiver may also be appointed if the Corporation is put in level III or IV and other fixes do not work and the Board thinks a conservator would not be appropriate. A conservator runs the Corporation to protect and stabilize it. A receiver winds up and liquidates the Corporation. The conservator or receiver may be the Farm Credit Administration, another government entity or employee, or a qualified person with no conflict and the needed financial and management skill. They and their hired professionals may be paid. Pay normally cannot exceed federal pay for similar work unless the Farm Credit Administration allows higher pay up to prevailing private-sector rates. Conservators or receivers can borrow money to pay expenses and meet obligations. Farm Credit banks may loan to them or buy Corporation assets. Valid expenses of the conservatorship have priority and can be secured by a lien. A private conservator or receiver is not personally liable for actions taken in the role unless those actions are grossly negligent, intentionally wrongful, or criminal. Within 30 days of appointment, the Corporation may sue in U.S. District Court for the District of Columbia to ask that the conservator or receiver be removed; the court must decide to dismiss the case or order removal. Other court actions involving the Corporation are stayed while that removal case is pending. Any agreement that would reduce the conservator’s or receiver’s rights in assets is not valid against them unless it is written at the time the asset was acquired, signed by the Corporation and the other party, approved by the Board (noted in the minutes), and kept as an official record continuously. If the receiver finds there are not enough assets to pay valid claims, the receiver must report the receivership’s financial condition to the Treasury Secretary and the Agriculture committees of both Houses of Congress. The Corporation’s charter and the Office of Secondary Market Oversight will be ended on a date the Board decides after receivership begins, but not later than the end of the receivership and discharge of the receiver.