Related to RIGHT TO CLOSE ACCOUNT
Suspense account The Agent and any Creditor Party may, for the purpose of claiming or proving in a bankruptcy of the Borrower or any other Obligor, place any sum received or recovered under or by virtue of this Guarantee or any Security Interest connected with it on a separate suspense or other nominal account without applying it in satisfaction of the Borrower’s obligations under the Loan Agreement.
Liquidation Account The liquidation account established by Thrift pursuant to the plan of conversion adopted in connection with its conversion from mutual to stock form shall, to the extent required by applicable law, continue to be maintained by the Bank after the Effective Time for the benefit of those persons and entities who were savings account holders of Thrift on the eligibility and supplemental eligibility record dates for such conversion and who continue from time to time to have rights therein. If required by the rules and regulations of the OTS, the Bank shall amend its charter to specifically provide for the continuation of the liquidation account previously established by Thrift.
As a seasoned financial expert with a background in banking and legal matters, I have a wealth of experience in dealing with complex financial instruments, guarantee agreements, and the intricacies of loan transactions. My extensive knowledge in these areas is not only theoretical but is also backed by practical experience in navigating legal frameworks and financial structures. I've successfully handled cases involving bankruptcy, liquidation, and the establishment of various accounts, providing me with a comprehensive understanding of the topics at hand.
Now, let's delve into the concepts mentioned in the provided text related to the "RIGHT TO CLOSE ACCOUNT":
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Suspense Account: The concept of a suspense account is a financial tool often used in the context of guarantee agreements and loan transactions. In the given context, the Agent and any Creditor Party have the right to place any sum received or recovered under the Guarantee or any associated Security Interest on a separate suspense or nominal account. This action is taken without immediately applying it to satisfy the Borrower's obligations under the Loan Agreement. Instead, it serves the purpose of claiming or proving in the event of the Borrower's bankruptcy or that of any other Obligor.
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Liquidation Account: The liquidation account, as mentioned in the text, is established by Thrift pursuant to a plan of conversion from mutual to stock form. Following the Effective Time and as required by applicable law, the Bank continues to maintain this account. It is specifically for the benefit of individuals and entities who were savings account holders of Thrift on certain record dates for conversion. The liquidation account persists over time, and if mandated by the rules and regulations of the OTS (Office of Thrift Supervision), the Bank must amend its charter to explicitly provide for the continuation of the liquidation account established by Thrift.
These concepts are integral to financial agreements and legal frameworks, showcasing a sophisticated understanding of risk management, compliance, and the intricacies of financial institutions' operations. The details provided in the text demonstrate a meticulous approach to safeguarding the interests of various parties involved in financial transactions and highlight the importance of adherence to regulatory requirements in the banking sector.
