2006 Louisiana Laws - RS 12:1605 — Effect of conversion

§1605.  Effect of conversion

When the conversion of a converting entity takes effect:

(1)  Unless otherwise agreed, the conversion will not constitute a dissolution of the converting entity, and the converting entity will not be required to wind up its affairs or pay its liabilities and distribute its assets.  The converting entity shall continue to exist, without interruption, but in the organizational form of the converted entity rather than in its prior organizational form.

(2)  All rights, title, and interest to all real estate and other property owned by the converting entity shall continue to be owned by the converted entity in its new organizational form without reversion or impairment, and without further act or deed, but subject to any existing liens or other encumbrances thereon.  However, the duplicate certificate of conversion must be filed for record in the conveyance records of each parish in this state in which the converting entity has immovable property that will transfer to the converted entity.

(3)  All liabilities and obligations of the converting entity shall continue to be liabilities and obligations of the converted entity in its new organizational form without impairment or diminution by reason of the conversion.

(4)  If the tax classification is different for the converting and converted entities, tax liabilities for the converting entity will be calculated based on the method prescribed by current law for the converting entity's tax classification.  This amount will be a liability of the converted entity.

(5)  All rights of creditors or other parties with respect to or against the prior interest holders or other owners of the converting entity in their capacities as such in existence as of the effective time of the conversion will continue in existence as to those liabilities and obligations and may be pursued by such creditors and obligees as if the conversion had not occurred.

(6)  A proceeding by or against the converting entity or by or against any of the converting entity's interest holders or owners in their capacities as such may be continued by or against the converted entity in its new organizational form and by or against the prior interest holders or owners, as the case may be, without any need for substitution of parties.

(7)  The ownership or membership interests in the converting entity that are to be converted into the ownership or membership interests in the converted entity as provided in the application for conversion shall be so converted.

(8)  If, after the effectiveness of the conversion, a shareholder, partner, member, or other owner of the converted entity would be liable under applicable law, in such capacity, for the debts or obligations of the converted entity, such shareholder, partner, member, or other owner of the converted entity shall be liable for the debts and obligations of the converting entity that existed before the conversion takes effect only to the extent that such shareholder, partner, member, or other owner:

(a)  Agreed in writing to be liable for such debts or obligations.

(b)  Was liable under applicable law, prior to the effectiveness of the conversion, for such debts or obligations.

(c)  By becoming a shareholder, partner, member, or other owner of the converted entity, becomes liable under applicable law for existing debts and obligations of the converted entity.

Acts 2006, No. 153, §1, eff. June 2, 2006.