§ 27-35-8 - Injunctions – Prohibitions against voting securities – Sequestration of voting securities. - Rhode Island Statutes

SECTION 27-35-8

   § 27-35-8  Injunctions – Prohibitionsagainst voting securities – Sequestration of voting securities. – (a) Injunctions. Whenever it appears to the commissioner that any personor any director, officer, employee, or agent of any director, officer, oremployee has committed or is about to commit a violation of this chapter or ofany rule, regulation, or order issued by the commissioner under this chapter,the commissioner may apply to the superior court for an order enjoining thatperson or that director, officer, employee, or agent of any director, officer,or employee from violating or continuing to violate this chapter or any rule,regulation or order, and for any other equitable relief that the nature of thecase and the interests of the insurer's policyholders, creditors, andshareholders or the public may require.

   (b) Voting of securities; when prohibited. No securitywhich is the subject of any agreement or arrangement regarding acquisition, orwhich is acquired or to be acquired, in contravention of the provisions of thischapter or of any rule, regulation, or order issued by the commissioner underthis chapter may be voted at any shareholders' meeting, or may be counted forquorum purposes, and any action of shareholders requiring the affirmative voteof a percentage of shares may be taken as though the securities were not issuedand outstanding; but no action taken at the meeting shall be invalidated by thevoting of the securities, unless the action would materially affect control ofthe insurer or unless the courts of this state have so ordered. If an insureror the commissioner has reason to believe that any security of the insurer hasbeen or is about to be acquired in contravention of the provisions of thischapter or of any rule, regulation, or order issued by the commissioner underthis chapter the insurer or the commissioner may apply to the superior court toenjoin any offer, request, invitation, agreement, or acquisition made incontravention of § 27-35-4 or any rule, regulation, or order issued by thecommissioner under that section to enjoin the voting of any security soacquired, to void any vote of the security already cast at any meeting ofshareholders, and for any other equitable relief that the nature of the caseand the interests of the insurer's policyholders, creditors, and shareholdersor the public may require.

   (c) Sequestration of voting securities. In any casewhere a person has acquired or is proposing to acquire any voting securities inviolation of this chapter or any rule, regulation, or order issued by thecommissioner under this chapter, the superior court may, on any notice that thecourt deems appropriate, upon the application of the insurer or thecommissioner seize or sequester any voting securities of the insurer owneddirectly or indirectly by the person, and issue any orders with respect tothose securities that may be appropriate to effectuate the provisions of thischapter. Notwithstanding any other provisions of law, for the purposes of thischapter, the situs of the ownership of the securities of domestic insurersshall be deemed to be in this state.