Iowa Code 501.616 – Value determined
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1. Within twenty days after the merger or consolidation is effected, the surviving or new cooperative shall make a written offer to each dissenting member to pay a specified sum deemed by the surviving or new cooperative to be the fair value of that dissenting member‘s interest in the old cooperative. This offer shall be accompanied by a balance sheet of the old cooperative as of the latest available date, a profit and loss statement of the old cooperative for the twelve-month period ending on the date of the balance sheet, and a list of the dissenting member’s interests in the old cooperative. If the dissenting member does not agree that the sum stated in the notice represents the fair value of the member’s interest, then the member may file a written objection with the surviving or new cooperative within twenty days after receiving the notice. A dissenting member who fails to file the objection within the twenty-day period is conclusively presumed to have consented to the fair value stated in the notice.
Terms Used In Iowa Code 501.616
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Consolidation: means the uniting of two or more cooperatives organized under this chapter into one cooperative organized under this chapter, in such manner that a new cooperative is formed, and the new cooperative absorbs the others, which cease to exist as separate entities. See Iowa Code 501.611
- Cooperative: means a cooperative association organized under this chapter or converted to this chapter pursuant to section 501. See Iowa Code 501.101
- Dissenting member: means a voting member who votes in opposition to the plan of merger or consolidation and who makes a demand for payment of the fair value under section 501. See Iowa Code 501.611
- 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
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Fair value: means the cash price that would be paid by a willing buyer to a willing seller, neither being under any compulsion to buy or sell. See Iowa Code 501.611
- Interest: means a voting interest or other interest in a cooperative as described in the cooperative's articles of association. See Iowa Code 501.101
- Issue price: means the amount paid for an interest in the old cooperative or the amount stated in a notice of allocation of patronage distributions. See Iowa Code 501.611
- Member: means a person who owns a voting interest in a cooperative. See Iowa Code 501.101
- Membership: means the interest established by a member owning a voting interest. See Iowa Code 501.101
- Merger: means the uniting of two or more cooperatives organized under this chapter into one cooperative organized under this chapter, in such manner that one of the merging associations continues to exist and absorbs the others, which cease to exist as entities. See Iowa Code 501.611
- Old cooperative: means the cooperative in which the member owns or owned a membership prior to merger or consolidation. See Iowa Code 501.611
- person: means individual, corporation, limited liability company, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, or any other legal entity. See Iowa Code 4.1
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
2. If the surviving or new cooperative receives any objections to fair values, then within ninety days after the merger or consolidation is effected, the surviving or new cooperative shall file a petition in district court asking for a finding and determination of the fair value of each type of equity. The action shall be tried as an equitable action.
3. The fair value of a dissenting member’s interest in the old cooperative shall be determined as of the day preceding the merger or consolidation by taking the lesser of either the issue price of the dissenting member’s membership, deferred patronage, and any other interests in the cooperative, or the amount determined by subtracting the old cooperative’s debts from the fair market value of the old cooperative’s assets, dividing the remainder by the total issue price of all memberships, deferred patronage, and all other interests, and then multiplying the quotient from this equation by the total issue price of a dissenting member’s membership, deferred patronage, and other interests.
4. The surviving or new cooperative shall pay to each dissenting member in cash within sixty days after the merger or consolidation the amount paid in cash by the dissenting member for that member’s interest in the old cooperative. The surviving or new cooperative shall pay the remainder of each dissenting member’s fair value in ten annual equal payments. The final payment must be made not later than fifteen years after the merger or consolidation. The value of the deferred patronage or interests issued to evidence deferred patronage shall be considered a liability of the surviving or new cooperative as reflected in the accounts of the surviving or new cooperative until the value of the deferred patronage or interests issued to evidence deferred patronage is paid in full to the dissenting member. A dissenting member who is a natural person who dies before receiving the fair value shall have all of the person’s fair value paid with the same priority as if the person was a member at the time of death.