2014 Kentucky Revised Statutes
CHAPTER 272 - COOPERATIVE CORPORATIONS AND ASSOCIATIONS
272.321 Member objecting to merger or consolidation to be paid for stock -- Value, how fixed -- Disposal of shares.
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<![CDATA[272.321 Member objecting to merger or consolidation to be paid for stock -Value, how fixed -- Disposal of shares.
(1)
(2)
(3)
A member of a constituent association to be affected by a merger or
consolidation may give to the association prior to or at the meeting of its
members to which the proposal of merger or consolidation is submitted to a
vote, written notice that he objects to such proposal. Within twenty (20) days
after the date on which the vote was taken, such member may, unless he votes
in favor of the proposal, make written demand on the association for payment
of the fair market value of his stock or other property rights or interest in the
association. Such demands shall state the number and class of shares of stock
owned by him or the nature and amount of other property rights or interest
owned by him in the association. In addition to any other right he may have in
law or equity, a member giving such notice shall be entitled, if and when the
merger or consolidation is effected, to be paid by the surviving association, or
new association, the fair market value of such stock, or other property rights or
interests, as of the day prior to the date on which the vote was taken, subject
only to the surrender by him of the certificate, or certificates of such stock or
other evidence of ownership or other property rights or interests.
If within thirty (30) days after the date upon which the objecting member
tendered his written demand for payment of his stock or other property rights or
interest, the fair market value of such stock or other property rights or interests
is agreed upon between the member and the surviving association, the
payment therefor shall be made within sixty (60) days after the date of such
agreement, upon surrender of the certificate or other evidence of such property
rights or interests, whereupon the member shall cease to have any interest in
such stock or other property rights or interest in the association.
If, during the thirty (30) day period mentioned in the preceding subsection, the
member and the surviving association or new association do not agree as to
the fair market value of such stock or other property rights or interests, the
member may, within sixty (60) days thereafter, file a petition in the Circuit Court
of the county in which the surviving association or new association has its
registered office or principal place of business asking for the appointment of
three (3) disinterested appraisers to appraise the fair market value of his stock
or other property rights or interests. A summons, together with a copy of the
petition, shall be served on the surviving association or new association at
least twenty (20) days prior to a hearing on the petition by the court. The award
of the appraisers, or a majority of them, if no exceptions be filed thereto within
ten (10) days after the award has been filed in court, shall be confirmed by the
court, and when confirmed shall be final and conclusive, and the member,
upon depositing with the court the proper stock certificates or other evidence of
such property rights or interests, shall be entitled to judgment against the
association for the appraised value thereof as of the day prior to the date on
which the vote was taken. If either party files exceptions to the award of the
appraisers within ten (10) days after the award has been filed in court, the case
shall be transferred to the civil issue docket of the Circuit Court for trial and
shall be there tried in the same manner, as near as may be practicable, as is
provided for the trial of cases under the eminent domain law of this state, and
with the same right of appeal to the Court of Appeals. The court shall assess
(4)
(5)
(6)
(7)
(8)
the cost of the proceedings as it deems equitable. Upon payment of the
judgment, the surviving association or new association is entitled to have the
member's stock certificates or other evidence of such property rights or
interests surrendered to it by the clerk of the court. Unless the member files
such a petition within the time prescribed, he, his assigns and heirs claiming
under him shall have no right to payment hereunder, but in that event nothing
herein shall impair his status as a member.
If the notices sent to members in connection with any meeting to vote upon a
proposed merger or consolidation make no reference to the provisions of
subsection (1) of this section, a member entitled to but through lack of actual
knowledge did not avail himself of the provisions of this section, unless he
voted for the proposal, is entitled, if he so demands in writing within one (1)
year after the date on which the vote was taken on the proposed merger or
consolidation, to recover from the surviving association or new association any
actual damage which he suffered from failure of the association of which he
was a member to make such reference.
The liability to pay for stock or other property rights or interests or to pay
damages imposed by subsection (4) of this section on an association extends
to the surviving association or new association.
Shares of stock acquired by an association, a surviving association, or a new
association pursuant to the payment of an agreed fair market value thereof or
to payment of a judgment entered therefor may be held and disposed of by
such association as in the case of other treasury shares.
This section does not apply to a merger if on the date of the filing of the articles
of merger the surviving association is the owner of all outstanding shares of the
other association or associations, domestic or foreign, participating in the
merger and if the merger makes no changes in the relative rights of the
members of the surviving association.
No member of a constituent association to be affected by a merger or
consolidation, who objects thereto and makes written demand for payment of
the fair market value of his stock or other property rights or interests in the
association, as provided in this section, is entitled to payment at any time prior
to the time that he would otherwise be entitled to payment pursuant to valid
provisions of such stock, or valid provisions of the articles of incorporation or
bylaws of the association, in effect on the date of the vote for such merger or
consolidation.
Effective:July 13, 1984
History: Amended 1984 Ky. Acts ch. 111, sec. 121, effective July 13, 1984. -Amended 1976 (1st Extra. Sess.) Ky. Acts ch. 14, sec. 259, effective January 2,
1978. -- Created 1966 Ky. Acts ch. 208, sec. 28.
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