2016 Tennessee Code
Title 48 - Corporations and Associations
Nonprofit Corporations
Chapter 62 - Sale of Assets
§ 48-62-102. Sale of assets other than in regular course of activities.

(a) (1) A corporation may sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property (with or without the good will) other than in the usual and regular course of its activities, on the terms and conditions and for the consideration determined by the corporation's board, if the proposed transaction is authorized by subsection (b).

(2) The sale, lease, exchange or other disposition of all, or substantially all, of the properties (with or without good will) of one (1) or more subsidiaries of a corporation in which such corporation possesses at least eighty percent (80%) of the total combined voting power of the corporation, or of all classes of membership otherwise entitled to vote for the election of directors, otherwise than in the usual and regular course of business, shall be treated as a disposition within the meaning of this subsection (a) if the subsidiary or subsidiaries constitute all, or substantially all, of the properties of the corporation.

(b) Unless chapters 51-68 of this title, the charter, bylaws, or the board of directors or members (acting pursuant to subsection (d)) require a greater vote or voting by class, the proposed transaction to be authorized must be approved:

(1) By the board;

(2) By the members by two-thirds (2/3) of the votes cast or a majority of the voting power, whichever is less; and

(3) In writing by any person or persons whose approval is required by the charter authorized by § 48-60-301 for an amendment to the charter or bylaws.

(c) If the corporation does not have members, the transaction must be approved by a vote of a majority of the directors in office at the time the transaction is approved and be approved in writing by any person or persons whose approval is required by the charter. The notice required by § 48-58-203(c) of any directors' meeting at which such approval is to be obtained must state that the purpose, or one (1) of the purposes, of the meeting is to consider the sale, lease, exchange, or other disposition of all or substantially all, of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction.

(d) The board may condition its submission of the proposed transaction, and the members may condition their approval of the transaction, on receipt of a higher percentage of affirmative votes or on any other basis.

(e) If the corporation seeks to have the transaction approved by the members at a membership meeting, the notice required by § 48-57-105 must state that the purpose, or one (1) of the purposes, of the meeting is to consider the sale, lease, exchange, or other disposition of all, or substantially all, of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction.

(f) If approval by the members by written consent or written ballot is required, the material soliciting the approval shall contain or be accompanied by a copy or summary of a description of the transaction.

(g) A public benefit corporation must give written notice to the attorney general and reporter at least forty-five (45) days before it sells, leases, exchanges or otherwise disposes of all, or substantially all, of its property in a transaction not in the usual and regular course of its activities unless the attorney general and reporter has given the corporation a written waiver of this subsection (g).

(h) After a sale, lease, exchange or other disposition of property is authorized, the transaction may be abandoned (subject to any contractual rights), without further action by the members or other person who approved the transaction in accordance with the procedure set forth in the resolution proposing the transaction or, if none is set forth, in the manner determined by the board of directors.