Page:United States Reports 502 OCT. TERM 1991.pdf/193

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Cite as: 502 U. S. 32 (1991)

35

Opinion of the Court

and managerial strength to its subsidiary banks.” 3 In October 1988, the Board commenced an administrative proceeding against MCorp,4 alleging that MCorp violated the source of strength regulation and engaged in unsafe and unsound banking practices that jeopardized the financial condition of its subsidiary banks. The Board also issued three temporary cease-and-desist orders.5 The first forbids MCorp to declare or pay any dividends without the prior approval of the Board. App. 65–67. The second forbids MCorp to dissipate any of its nonbank assets without the prior approval of the Board. Id., at 68–70. The third directs MCorp to use “all of its assets to provide capital support to its Subsidiary Banks in need of additional capital.” Id., at 85. By agreement, enforcement of the third order was suspended while MCorp sought financial assistance from the Federal Deposit Insurance Corporation (FDIC).6 In March 1989, the FDIC denied MCorp’s request for assistance. Thereafter, creditors filed an involuntary bankruptcy petition against MCorp in the Southern District of New York, and the Comptroller of the Currency determined that 20 of MCorp’s subsidiary banks were insolvent and, accordingly, appointed the FDIC as receiver of those banks. MCorp then filed voluntary bankruptcy petitions in the 3 See n. 1, supra. In 1987, the Board clarified its policy and stated that a “bank holding company’s failure to assist a troubled or failing subsidiary bank. . . would generally be viewed as an unsafe and unsound banking practice or a violation of [12 CFR § 225.4(a)(1)] or both.” 52 Fed. Reg. 15707–15708. 4 The term “MCorp” refers to the corporation and to two of its wholly owned subsidiaries, MCorp Financial, Inc., and MCorp Management. 5 MCorp timely challenged these orders in the District Court for the Northern District of Texas, pursuant to 12 U. S. C. § 1818(c)(2). The District Court stayed MCorp’s challenge pending resolution of this proceeding. Brief for MCorp et al. 3. 6 The current status of this order is unclear. See Tr. of Oral Arg. 22–25, 41–42. We address only MCorp’s effort to enjoin the Board’s administrative proceedings and express no opinion on the continuing vitality or validity of any of the temporary cease-and-desist orders.