(a) Discontinuance. An independent trust company that intends to discontinue its trust business in this State shall furnish notice to the Commissioner of its intention not less than 60 days before the discontinuance. It shall also mail written notice to the principals of each trust account affected. For purposes of this section, the term "principal" with respect to a trust account shall mean the individual or entity to whom the independent trust company ordinarily furnishes statements of account and other customer communications regarding such trust account. The form of notice required by this subsection shall be approved by the Commissioner and shall include a plain statement of the intended plans for discontinuance of the business of the independent trust company, and shall include the name, mailing address and telephone number of one or more officers, managers, employees, or agents of the company available during regular business hours to answer customer questions regarding the proposed discontinuance. The company shall furnish an affidavit of the mailing of the notice to the principals affected, and the affidavit shall constitute the company's compliance with the customer notice requirement of this section. Following the mailing of the notice and prior to the effective date of the discontinuance, the company shall furnish the Commissioner with satisfactory evidence that all affected trust accounts have been transferred to one or more entities with authority to engage in a trust business in this State in accordance with subsections (c) through (j) of this section, that the principal has released and discharged the independent trust company of any further obligation with respect to the account or that all accounts are otherwise protected. The independent trust company shall surrender its certificate of authority to the Commissioner upon the effective date of the discontinuance, and thereafter the company may not use the word "trust" in its company or trade name or in connection with its business. After surrender of the certificate, the Commissioner shall have continuing jurisdiction over the company with respect to compliance with applicable law.

(b) Merger or consolidation. An independent trust company formed in this State may merge or consolidate with another entity. The independent trust company must obtain the Commissioner's prior written approval of the transaction. The Commissioner shall approve the transaction if the Commissioner determines that the resulting entity is qualified to do a trust business in this State and that the transaction will promote the general good of the State. Whenever an independent trust company merges or consolidates under this section, the resulting entity shall have, possess, and own, all property, rights, powers, franchises, privileges, and appointments of every nature whatsoever of each of the merging or consolidating entities. If any of the merging or consolidating entities are acting or have been acting as a fiduciary or in any like capacity, the resulting entity shall have, possess, and be vested with and succeed to all of the property, rights, powers, privileges, duties, and obligations appertaining to each such fiduciary capacity, without further or additional appointment, obligation, or designation, provided the independent trust company or resulting entity, as the case may be, has complied with the provisions of subsections (d) through (j) of this section. The resulting entity shall be a continuation of the entity of each and all of the entities so merged or consolidated. Except as provided in this chapter, it shall hold, exercise, and perform all rights, powers, privileges, duties, and obligations appertaining to any and all trust, representative, or fiduciary relationships of each of the merged or consolidated entities, and shall be liable for all of the debts, contracts, and obligations of each of the merged or consolidated companies. Any such debt, undertaking, or obligations of any merged or consolidated entity may be enforced against it as fully and effectively as it could have been against the merged or consolidated entity.

(c) Sale of assets or trust business. An independent trust company may transfer all or substantially all of its assets or all or a portion of its trust business to another entity qualified to do a trust business in this State. Prior to transferring all or substantially all of its assets or any portion or all of its trust business to another entity, an independent trust company shall obtain the Commissioner's written approval. The Commissioner shall approve the transaction if the Commissioner determines that the transferee entity is qualified to do a trust business in this State and that the transaction will promote the general good.

(d) Petition; notice to the Commissioner; order. Whenever an independent trust company intends to merge into, consolidate with, or transfer all or substantially all of its assets or any of its trust business to another entity qualified to do a trust business in this State as provided in subsection (b) or (c) of this section, it shall file a petition in the Probate Division of the Superior Court of the Probate District in which its main office is located requesting that the Court substitute the resulting or transferee entity, except as may be specifically excluded in such petition, in every fiduciary capacity specified in the petition. The petition may be made ex parte and need not list the fiduciary capacities in which substitution is made. A copy of the petition shall be furnished to the Commissioner prior to filing with the Probate Division of the Superior Court. Upon a finding that the resulting or transferee entity is authorized to engage in a trust business by the Commissioner, the Commissioner has approved the transaction, and that independent trust company has complied with the notification requirements in this subsection and subsection (e) of this section, the Court shall enter an order substituting the resulting or transferee entity in every fiduciary capacity for the independent trust company, except as otherwise specified in the independent trust company's petition. The petition made pursuant to this section shall be considered in a summary fashion by the Court, and the Court shall act on the petition within 30 days of filing. Upon entry of the Court's substitution order, the resulting or transferee entity shall, without further act, be deemed substituted by operation of law in every such fiduciary capacity. The substitution shall be evidenced by filing a copy of the order with the clerk of the Probate Division of the Vermont Superior Court in each Probate District in which the independent trust company served in a fiduciary capacity prior to the entry of the order. The order shall be accompanied by written notification to the Court of each fiduciary appointment previously made by the Court that is affected by the substitution order, and evidence of compliance with subsection (h) of this section. The order of substitution shall be indexed in the records of the courts in the manner in which substitutions of fiduciaries are indexed.

(e) Notice of petition to customer. After the entity that will be the resulting or transferee entity under subsection (b) or (c) of this section is authorized to do a trust business in this State by the Commissioner, but at least 30 days before the filing of the petition referred to in subsection (d) of this section, the independent trust company shall mail written notice of the proposed substitution to the principals of each trust account affected. The form of notice required by this subsection shall be approved by the Commissioner and shall include a statement that the independent trust company intends to merge or consolidate with, or transfer all or substantially all of its assets or all or a portion of its trust business, to a resulting or transferee entity, as the case may be, and intends to substitute the resulting or transferee entity as or for the independent trust company. The notice shall include the name, mailing address, and telephone number of one or more officers, managers, employees, or agents of the independent trust company available during regular business hours to answer customer questions regarding the proposed substitution. The independent trust company shall furnish an affidavit of the mailing of the notice to the Probate Division of the Superior Court in conjunction with the filing of the independent trust company's petition referred to in subsection (d) of this section, and the affidavit shall constitute the independent trust company's compliance with this section. Following the mailing of the notice and prior to the effective date of the substitution order, each prospective trust customer of the independent trust company or of the resulting or transferee entity shall be furnished with a copy of the notice required by this subsection before the customer and the company enter into a trust account relationship.

(f) Post-order notice. Within 30 days after the entry of the substitution order referred to in subsection (d) of this section, the resulting or transferee entity shall mail written notice of the entry of the order of substitution to the principals of each trust account affected. The notice shall specify that the substitution has been effected and shall include the name, mailing address, and telephone number of one or more officers, managers, or employees of the resulting or transferee entity available during regular business hours to answer customer questions regarding the substitution.

(g) Effect of substitution order. Each fiduciary designation in a will, trust, or other instrument executed before or after the entry of an order of substitution, shall be deemed by operation of law to be a designation of the resulting or transferee entity, substituted pursuant to this section, without further act or amendment of the will, trust, or other instrument, unless the will, trust, or other instrument is executed after the date of entry of the order of substitution and specifically negates application of this section.

(h) Bonds. If any company for which the resulting or transferee entity has been substituted pursuant to this section has given bond in any fiduciary capacity, the resulting or transferee entity shall be required to furnish to the Court or authority making the appointment a substitute bond in like amount and terms before the company shall be released from liability on its bond.

(i) Accounting. Any company, for which the resulting or transferee entity has been substituted pursuant to this section, shall account jointly with the resulting or transferee entity for the accounting period during which the effective date of the substitution occurs. Upon substitution pursuant to this section, the company shall deliver to the resulting or transferee entity all assets addressed in the substitution order held by the company as fiduciary and upon the substitution, all the assets shall become the property of the resulting or transferee entity as fiduciary without the necessity of any instrument of transfer or conveyance.

(j) Affiliated transactions. Upon substitution of the resulting or transferee entity pursuant to this section, the resulting or transferee entity shall pay fair consideration to any affiliated independent trust company for which it has been substituted as fiduciary for the trust business it has acquired from the affiliate as a result of the substitution.

(k) Change in control. Any person that intends to transfer 10 percent or more of the voting interests in an independent trust company regulated under this chapter to any other person shall provide the Commissioner with at least 30 days' written notice. (Added 1997, No. 98 (Adj. Sess.), § 8b; amended 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011.)