Possession By Commissioner - Liquidation And Conservatorship - Financial - CA

Section § 17621

The California commissioner has the power to intervene if an escrow agent is doing anything seriously wrong. This includes being financially unstable, not following state laws, refusing inspector access to their records, not complying with orders, allowing misappropriation of funds, having insufficient net worth, or failing to meet bonding requirements. If any of these issues occur, the commissioner will notify the escrow agent and give them a chance to fix things. If the agent doesn't comply within five days, or it seems they can't comply, the commissioner can take control of the agent's property and business until it is back to normal or liquidated. Agents may resume business with the commissioner's permission and under certain conditions.

Whenever it appears to the commissioner that any escrow agent subject to this division:

(a) Is in an insolvent condition;

(b) Is conducting escrow business in an unsafe or unauthorized manner;

(d) Refuses to submit its books, papers and affairs to the inspection of any examiner;

(e) Neglects or refuses to observe any order of the commissioner made pursuant to the provisions of this division, within the time specified therein, unless the enforcement of such order is restrained in a proceeding brought by the escrow agent;

(f) Any officer, director, or trustee of such escrow agent refuses to be examined upon oath touching the business of such escrow agent;

(g) Any officer, director, stockholder, or trustee of such escrow agent, or attorney in fact of such escrow agent has embezzled, sequestered, or willfully diverted the assets or trust funds of such escrow agent;

(h) Has permitted its tangible net worth to be lower than the minimum required by law;

(i) Has failed to comply with the bonding requirements of Chapter 2 of this division

the commissioner shall dispatch a written notice and summary of findings, as referred to in Section 17415, to the principal officer of the escrow agent involved or to its manager of record; and such escrow agent shall be afforded a reasonable opportunity to comply or otherwise effect such remedies as the commissioner may deem acceptable. However, should the escrow agent so notified fail to comply within five days of receipt of the notice, or as soon as it appears to the commissioner that no compliance is possible, or in the event prompt delivery of the prescribed written notice is impossible, the commissioner may forthwith take possession of the property and business of such escrow agent and retain possession until such escrow agent resumes business or its affairs be finally liquidated as provided in this chapter. The escrow agent, with the consent of the commissioner, may resume business upon such conditions as the commissioner may prescribe.

escrow agent insolvency unsafe business practices unauthorized escrow conduct ...

Section § 17622

If a commissioner takes control of a business that has a license, the business has 10 days to ask the court for help if they believe this action was wrong. They can apply to the local superior court to stop the commissioner from continuing. The court will then review the situation and can decide either to allow the commissioner to keep control, to stop them and give the business back, or to give other instructions as needed.

Whenever the commissioner has taken possession of any licensee, such licensee, within 10 days after such taking, if it deems it is aggrieved thereby, may apply to the superior court in the county in which the head office of the licensee is located to enjoin further proceedings. The court, after citing the commissioner to show cause why further proceedings should not be enjoined and after a hearing and a determination of the facts upon the merits may dismiss such application or enjoin the commissioner from further proceeding and direct him to surrender the property and business to the licensee, or make such further order as may be just.

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Section § 17623

This law explains what happens when someone appeals a court decision that ordered the commissioner to stop certain actions and give back control of business property and assets to someone with a license. Normally, appealing this kind of decision doesn't pause its effect unless the trial court decides to pause it. If the original judgment dismisses the case, appealing that also doesn't automatically pause the decision. However, the court can choose to temporarily stop the commissioner from taking further actions and make him give back the business assets while the appeal is happening, as long as certain conditions are met under another legal chapter.

An appeal from a judgment enjoining the commissioner from further proceedings and directing the commissioner to surrender the business, property, and assets to the licensee does not operate as a stay of the judgment, unless the trial court in its discretion so orders. If the judgment dismisses the action an appeal therefrom does not operate as a stay of the judgment but the court rendering the judgment may, in its discretion enjoin the commissioner pending the appeal, from further proceedings and direct the commissioner, pending the appeal, to surrender the business, property, and assets to the licensee, if an undertaking is given as required by Chapter 2 (commencing with Section 916) of Title 13 of Part 2 of the Code of Civil Procedure.

commissioner appeal stay of judgment trial court discretion ...

Section § 17625

If a business doesn't hand over its property and assets to the commissioner within 24 hours of being asked, the commissioner can ask the county sheriff to help enforce it. The sheriff, upon receiving a written request, has to enforce the commissioner's demand.

If the commissioner’s demand for the possession of the property, business and assets is not complied with within 24 hours after service of the demand, the commissioner may call to his assistance the sheriff of the county in which the principal place of business of such licensee is located, by giving the sheriff written demand the sheriff shall enforce the demands of the commissioner.

commissioner's demand business assets property possession ...

Section § 17626

If the commissioner takes over a licensee's property, business, and assets, the licensee or its president and secretary must provide verified lists of their property, assets, and funds held in escrow. The commissioner can question, under oath, any licensee or their representatives at any time to ensure these items have been properly transferred to their control.

When the commissioner takes possession of the property, business and assets of any licensee, such licensee or the president and secretary of such licensee shall make and deliver to the commissioner verified schedules of its property, assets, and funds held in escrow. The commissioner may at any time examine under oath any licensee, or any officer, director, trustee, agent, or employee of such licensee, to determine whether or not all such property, assets, and funds held in escrow have been transferred and delivered to his possession.

commissioner possession licensee obligations verified schedules ...

Section § 17627

This law states that the commissioner has the power to issue subpoenas, which are legal orders requiring someone to attend and sometimes present evidence, for examination purposes as outlined in this chapter.

The commissioner may issue subpoenas and require the attendance of parties for examination under this article as provided for in this chapter.

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Section § 17628

If the commissioner takes control of a licensee's business, property, or assets, they can appoint a custodian to oversee these on their behalf. The commissioner can also require the custodian to provide a bond as a security measure.

When the commissioner takes possession of the business, property, and assets of a licensee, he may appoint a custodian. The commissioner may require a good and sufficient bond from the custodian and place him in charge as his representative.

commissioner control appointment of custodian business possession ...

Section § 17629

If a financial overseer, called a commissioner, takes control of a business's property and assets, they can collect any money owed to that business and provide receipts for those payments. The commissioner can also perform other actions needed to manage and safeguard the business's property and assets.

When the commissioner takes possession of the property, business, and assets of a licensee, he may collect all money due to such licensee and give receipt therefor. The commissioner may do such other acts as are necessary or expedient to collect, conserve, or protect the licensee’s business, property, and assets.

commissioner authority property possession asset management ...