2019 Tennessee Code
Title 48 - Corporations and Associations
Nonprofit Corporations
Chapter 61 - Mergers, Membership Exchanges, Entity Conversions, and For-Profit Conversions
§ 48-61-108. Effect of merger or membership exchange.
(a) When a merger becomes effective:
(1) The corporation or eligible entity that is designated in the plan of merger as an entity surviving the merger shall survive, and the separate existence of every other corporation or eligible entity that is a party to the merger shall cease;
(2) All property owned by, and every contract right possessed by, each corporation or eligible entity that is merged into the survivor shall be vested in the survivor without reversion or impairment;
(3) All liabilities of each corporation or eligible entity that is merged into the survivor shall be vested in the survivor;
(4) A proceeding pending against any corporation or eligible entity that is a party to the merger may be continued as if the merger did not occur or the name of the survivor may be substituted in the proceeding for any corporation or eligible entity whose existence ceased in the merger;
(5) The charter or organic document of the survivor shall be amended to the extent provided in the plan of merger;
(6) The charter or organic documents of a survivor created by the plan of merger shall become effective; and
(7) The memberships of each corporation and the interests of each eligible entity that are to be converted into memberships, other securities, interests, obligations, rights to acquire memberships, other securities or eligible interests, cash, other property, or any combination of the foregoing in the merger shall be converted or exchanged, and the former holders of such memberships or eligible interests shall be entitled only to the rights provided to them in the plan of merger or to their rights under the organic law of the eligible entity.
(b) When a membership exchange takes effect, the memberships of each corporation that are to be exchanged for memberships, other securities, interests, obligations, rights to acquire memberships, other securities or eligible interests, cash, other property or any combination of the foregoing in the membership exchange shall be exchanged, and the former holders of such memberships shall be entitled only to the rights provided in the plan of membership exchange.
(c) Upon a merger becoming effective, a foreign corporation, or a foreign eligible entity, that is the survivor of the merger is deemed to:
(1) Appoint the secretary of state as its agent for service of process in a proceeding to enforce the rights of members of each domestic corporation that is a party to the merger; and
(2) Agree that it will promptly pay the amount, if any, to which such members are entitled under the plan of merger.
(d) The effect of a merger or membership exchange on the owner liability of a person who had owner liability for some or all of the debts, obligations or liabilities of a party to the merger or membership exchange shall be as follows:
(1) The merger or membership exchange does not discharge any owner liability under the organic law of the entity in which the person was a member or interest holder to the extent any such owner liability arose before the effective time of the articles of merger or membership exchange;
(2) The person shall not have owner liability under the organic law of the entity in which the person was member or eligible interest holder prior to the merger or membership exchange for any debt, obligation or liability that arises after the effective time of the articles of merger or membership exchange;
(3) The organic law of any entity for which the person had owner liability before the merger or membership exchange shall continue to apply to the collection or discharge of any owner liability preserved by subdivision (d)(1), as if the merger or membership exchange had not occurred; and
(4) The person shall have whatever rights of contribution from other persons are provided by the organic law of the entity for which the person had owner liability with respect to any owner liability preserved by subdivision (d)(1), as if the merger or membership exchange had not occurred.
(e) A merger or membership exchange shall take effect upon the date the articles of merger or membership exchange are filed as provided in § 48-61-107(b) or on such later date as may be specified in the plan of merger or share exchange.
