2009 Iowa Code
Title 12 - Business Entities
Subtitle 2 - Business and Professional Corporations and Companies
CHAPTER 490 - BUSINESS CORPORATIONS
490.1434 - ELECTION TO PURCHASE IN LIEU OF DISSOLUTION.

        490.1434  ELECTION TO PURCHASE IN LIEU OF
      DISSOLUTION.
         1.  In a proceeding under section 490.1430, subsection 2, to
      dissolve a corporation that has no shares listed on a national
      securities exchange or regularly traded in a market maintained by one
      or more members of a national or affiliated securities association,
      the corporation may elect or, if it fails to elect, one or more
      shareholders may elect to purchase all shares owned by the
      petitioning shareholder at the fair value of the shares.  An election
      pursuant to this section shall be irrevocable unless the court
      determines that it is equitable to set aside or modify the election.

         2.  An election to purchase pursuant to this section may be filed
      with the court at any time within ninety days after the filing of the
      petition under section 490.1430, subsection 2, or at such later time
      as the court in its discretion may allow.  If the election to
      purchase is filed by one or more shareholders, the corporation shall,
      within ten days thereafter, give written notice to all shareholders,
      other than the petitioner.  The notice must state the name and number
      of shares owned by the petitioner and the name and number of shares
      owned by each electing shareholder and must advise the recipients of
      their right to join the election to purchase shares in accordance
      with this section.  Shareholders who wish to participate must file
      notice of their intention to join in the purchase no later than
      thirty days after the effective date of the notice to them.  All
      shareholders who have filed an election or notice of their intention
      to participate in the election to purchase thereby become parties to
      the proceeding and shall participate in the purchase in proportion to
      their ownership of shares as of the date the first election was
      filed, unless they otherwise agree or the court otherwise directs.
      After an election has been filed by the corporation or one or more
      shareholders, the proceeding under section 490.1430, subsection 2,
      shall not be discontinued or settled, nor shall the petitioning
      shareholder sell or otherwise dispose of the shareholder's shares,
      unless the court determines that it would be equitable to the
      corporation and the shareholders, other than the petitioner, to
      permit such discontinuance, settlement, sale, or other disposition.
         3.  If, within sixty days of the filing of the first election, the
      parties reach agreement as to the fair value and terms of purchase of
      the petitioner's shares, the court shall enter an order directing the
      purchase of the petitioner's shares upon the terms and conditions
      agreed to by the parties.
         4.  If the parties are unable to reach an agreement as provided
      for in subsection 3, the court, upon application of any party, shall
      stay the section 490.1430, subsection 2, proceedings and determine
      the fair value of the petitioner's shares as of the day before the
      date on which the petition under section 490.1430, subsection 2, was
      filed or as of such other date as the court deems appropriate under
      the circumstances.
         5.  Upon determining the fair value of the shares, the court shall
      enter an order directing the purchase upon such terms and conditions
      as the court deems appropriate, which may include payment of the
      purchase price in installments, where necessary in the interests of
      equity, provision for security to assure payment of the purchase
      price and any additional costs, fees, and expenses as may have been
      awarded, and, if the shares are to be purchased by shareholders, the
      allocation of shares among them.  In allocating petitioner's shares
      among holders of different classes of shares, the court shall attempt
      to preserve the existing distribution of voting rights among holders
      of different classes insofar as practicable and may direct that
      holders of a specific class or classes shall not participate in the
      purchase.  Interest may be allowed at the rate and from the date
      determined by the court to be equitable, but if the court finds that
      the refusal of the petitioning shareholder to accept an offer of
      payment was arbitrary or otherwise not in good faith, no interest
      shall be allowed.  If the court finds that the petitioning
      shareholder has probable grounds for relief under section 490.1430,
      subsection 2, paragraph "b" or "d", it may award to the
      petitioning shareholder reasonable fees and expenses of counsel and
      of any experts employed by the shareholder.
         6.  Upon entry of an order under subsection 3 or 5, the court
      shall dismiss the petition to dissolve the corporation under section
      490.1430, and the petitioning shareholder shall no longer have any
      rights or status as a shareholder of the corporation, except the
      right to receive the amounts awarded to the shareholder by the order
      of the court which shall be enforceable in the same manner as any
      other judgment.
         7.  The purchase ordered pursuant to subsection 5 shall be made
      within ten days after the date the order becomes final, unless before
      that time the corporation files with the court a notice of its
      intention to adopt articles of dissolution pursuant to sections
      490.1402 and 490.1403, which articles must then be adopted and filed
      within fifty days thereafter.  Upon filing of such articles of
      dissolution, the corporation shall be dissolved in accordance with
      the provisions of sections 490.1405 through 490.1407, and the order
      entered pursuant to subsection 5 shall no longer be of any force or
      effect, except that the court may award the petitioning shareholder
      reasonable fees and expenses in accordance with the provisions of the
      last sentence of subsection 5 and the petitioner may continue to
      pursue any claims previously asserted on behalf of the corporation.
         8.  Any payment by the corporation pursuant to an order under
      subsection 3 or 5, other than an award of fees and expenses pursuant
      to subsection 5, is subject to the provisions of section 490.640.  

         2002 Acts, ch 1154, §98, 125
         Referred to in § 490.1431
         Effective date of notice, see § 490.141