The new rules provide for four types of conversions: (1) standard conversions; (2) sale-of-control conversions; (3) voluntary supervisory conversions; and (4) modified conversions. In a standard conversion, association members receive, without payment, nontransferable subscription rights to purchase shares on a preemptive basis according to the categories of eligibility and in amounts set in the regulations. Any shares of the converting institution not sold to persons with subscription rights must be sold in an underwritten public offering or in a direct community offering. A sale-of-control conversion allows association members to vote to sell a controlling stock interest in the institution to one or more third parties. A voluntary supervisory conversion entails the conversion of a technically insolvent institution without the consent of or participation by the mutual members. The modified conversion regulations allow, on a test-case basis for qualifying institutions, conversions resembling sale-of-control conversions, without bidding or member consent, but with member participation through preemptive rights.
Saba, Peter B. and Robbins, Robert B.
"Savings and Loan Associations - Mutual to Stock Conversions Under The Revised Regulations,"
Akron Law Review: Vol. 17
, Article 5.
Available at: https://ideaexchange.uakron.edu/akronlawreview/vol17/iss3/5