Florida Statutes 607.0152 – Judicial proceedings regarding validity of corporate actions
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(1) Subject to subsection (4), upon application by the corporation, any successor entity to the corporation, a director of the corporation, any shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner of the corporation, including any such shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner as of the date of the defective corporate action ratified pursuant to s. 607.0147; or any other person claiming to be substantially and adversely affected by a ratification in accordance with s. 607.0147, the circuit court in the applicable county may take any one or more of the following actions:
(a) Determine the validity and effectiveness of any corporate action or defective corporate action ratified pursuant to s. 607.0147.
Terms Used In Florida Statutes 607.0152
- Applicable county: means : the county in this state in which a corporation's principal office is located or was located when an action is or was commenced; if the corporation has, and at the time of such action had, no principal office in this state, then in the county in which the corporation has, or at the time of such action had, an office in this state; or if the corporation does not have an office in this state, then in the county in which the corporation's registered office is or was last located. See Florida Statutes 607.01401
- Articles of incorporation: includes original, amended, and restated articles of incorporation, articles of share exchange, and articles of merger, and all amendments thereto. See Florida Statutes 607.01401
- Beneficial shareholder: means a person who owns the beneficial interest in shares. See Florida Statutes 607.01401
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Department: means the Florida Department of State. See Florida Statutes 607.01401
- Entity: includes corporation and foreign corporation; unincorporated association; business trust, estate, limited liability company, partnership, trust, and two or more persons having a joint or common economic interest; and state, United States, and foreign governments. See Florida Statutes 607.01401
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Expenses: means reasonable expenses of any kind that are incurred in connection with a matter. See Florida Statutes 607.01401
- Interest: means :(a) A share in a corporation for profit;(b) A membership in a nonprofit corporation;(c) A partnership interest in a general partnership, including a limited liability partnership;(d) A partnership interest in a limited partnership, including a limited liability limited partnership;(e) A membership interest in a limited liability company;(f) A share or beneficial interest in a real estate investment trust;(g) A member's interest in a limited cooperative association;(h) A beneficial interest in a statutory trust, business trust, or common law business trust; or(i) A governance interest or distributional interest in another entity. See Florida Statutes 607.01401
- Person: includes an individual and an entity. See Florida Statutes 607.01401
- Shareholder: means a record shareholder. See Florida Statutes 607.01401
- Shares: means the units into which the proprietary interests in a corporation are divided. See Florida Statutes 607.01401
- Unrestricted voting trust beneficial owner: means , with respect to any shareholder rights, a voting trust beneficial owner whose entitlement to exercise the shareholder right in question is not inconsistent with the voting trust agreement. See Florida Statutes 607.01401
- Voting trust beneficial owner: means an owner of a beneficial interest in shares of the corporation held in a voting trust established pursuant to…. See Florida Statutes 607.01401
(b) Determine the validity and effectiveness of any ratification of any defective corporate action pursuant to s. 607.0147.(c) Determine the validity and effectiveness of any defective corporate action not ratified or not ratified effectively pursuant to s. 607.0147.(d) Determine the validity of any putative shares.
(2) In connection with an action brought under this section, the court may make such findings or issue such orders and take into account any one or more factors or considerations as it deems proper under the circumstances, including, but not limited to, any one or more of the factors, considerations, findings, and orders set forth in subsections (5) and (6).
(3) Service of process of the application under subsection (1) on the corporation may be made in any manner provided in chapter 48 for service on a corporation, and no other party need be joined in order for the court to adjudicate the matter. In an action filed by the corporation, the court may require that notice of the action be provided to other persons specified by the court and permit such other persons to intervene in the action.
(4) Notwithstanding any other law to the contrary, any action asserting that the ratification of a defective corporate action, and any putative shares issued as a result of such defective corporate action, should not be effective, or should be effective only on certain conditions, must be brought, if at all, within 120 days after the validation effective time.
(5) In connection with the resolution of matters under subsection (2), the court may consider any of the following:
(a) Whether the defective corporate action was originally approved or effectuated with the belief that the approval or effectuation was in compliance with the provisions of this chapter, the articles of incorporation, or the bylaws of the corporation.
(b) Whether the corporation and board of directors have treated the defective corporate action as a valid act or transaction and whether any person has acted in reliance on the public record that such defective corporate action was valid.
(c) Whether any person will be or was harmed by the ratification or validation of the defective corporate action, excluding any harm that would have resulted if the defective corporate action had been valid when approved or effectuated.
(d) Whether any person will be harmed by the failure to ratify or validate the defective corporate action.
(e) Whether the defective corporate action was a conflict of interest transaction.
(f) Any other factors or considerations the court deems just and equitable.
(6) In connection with an action under this section, the court may do any one or more of the following:
(a) Declare that a ratification in accordance with and pursuant to s. 607.0147 is not effective or shall only be effective at a time or upon conditions established by the court.
(b) Validate and declare effective any defective corporate action or putative shares and impose conditions upon such validation.
(c) Require measures to remedy or avoid harm to any person substantially and adversely affected by a ratification in accordance with and pursuant to s. 607.0147 or by any order of the court pursuant to this section, excluding any harm that would have resulted if the defective corporate action had been valid when approved or effectuated.
(d) Order the department to accept an instrument for filing with an effective time specified by the court, which effective time may be before or after the date and time of such order, provided that the filing date of such instrument shall be determined in accordance with s. 607.0123.
(e) Approve a stock ledger for the corporation that includes any shares ratified or validated in accordance with this section or s. 607.0147.
(f) Declare that the putative shares are valid shares or require a corporation to issue and deliver valid shares in place of any putative shares.
(g) Order that a meeting of holders of valid shares or putative shares be held and exercise such powers as it deems appropriate with respect to such a meeting.
(h) Declare that a defective corporate action validated by the court shall be effective as of the date and time of the defective corporate action or at such other date and time as determined by the court.
(i) Declare that putative shares validated by the court shall be deemed to be identical valid shares or fractions of valid shares as of the date and time originally issued or purportedly issued or at such other date and time as determined by the court.
(j) Require payment by the corporation of reasonable expenses, including attorney fees and costs, that the court finds just and equitable under the circumstances.
(k) Issue other orders as it deems necessary and proper under the circumstances.