Kentucky Statutes 272A.11-010 – Member’s dissociation
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(1) A person has the power to dissociate as a member at any time, rightfully or wrongfully, by express will.
(2) Unless the organic rules otherwise provide, a member’s dissociation from a limited cooperative association is wrongful only if the dissociation:
(a) Breaches an express provision of the organic rules; or
(b) Occurs before the termination of the limited cooperative association and:
1. The person is expelled as a member under subsection (4)(c) or (d) of this section; or
2. In the case of a person that is not an individual, trust other than a business trust, or estate, the person is expelled or otherwise dissociated as a member because it dissolved or terminated in bad faith.
(3) Unless the organic rules otherwise provide, a person that wrongfully dissociates as a member is liable to the limited cooperative association for damages caused by the dissociation. The liability is in addition to any other debt, obligation, or liability of the person to the association.
(4) A member is dissociated from the limited cooperative association as a member when:
(a) The association receives notice in a record of the member’s express will to dissociate as a member, or if the member specifies in the notice an effective date later than the date the association received notice, on that later date;
(b) An event stated in the organic rules as causing the member’s dissociation as a member occurs;
(c) The member is expelled as a member under the organic rules;
(d) The member is expelled as a member by the board of directors because:
1. It is unlawful to carry on the association’s activities with the member as a member;
2. There has been a transfer of all the member’s financial rights in the association, other than:
a. A creation or perfection of a security interest; or
b. A charging order in effect under KRS § 272A.6-050 which has not been foreclosed;
3. The member is a limited liability company, association, or partnership, which has been dissolved, and its business is being wound up;
4. The member is a corporation or cooperative and:
a. The member filed articles of dissolution or the equivalent, or the jurisdiction of formation revoked its charter or right to conduct business;
b. The association sends a notice to the member that it will be expelled as a member for a reason described in subdivision a. of this subparagraph; and
c. Not later than ninety (90) days after the notice was sent under subdivision b. of this subparagraph, the member did not revoke its articles of dissolution or the equivalent, or the jurisdiction of formation did not reinstate the corporation‘s or cooperative’s charter or right to conduct business; or
5. The member is an individual and is adjudged incompetent; (e) In the case of a member who is an individual, the individual dies;
(f) In the case of a member that is a trust or is acting as a member by virtue of being a trustee of a trust, all the trust’s financial rights in the association are distributed;
(g) In the case of a member that is an estate, the estate’s entire financial interest in the association is distributed;
(h) In the case of a member that is not an individual, partnership, limited liability company, cooperative, corporation, trust, or estate, the member is terminated; or
(i) The association’s participation in a merger if, under the plan of merger, the member ceases to be a member.
Effective: July 12, 2012
History: Created 2012 Ky. Acts ch. 160, sec. 85, effective July 12, 2012.
(2) Unless the organic rules otherwise provide, a member’s dissociation from a limited cooperative association is wrongful only if the dissociation:
Terms Used In Kentucky Statutes 272A.11-010
- Business trust: includes , except when utilized in KRS Chapter 386, a "statutory trust" as organized under KRS Chapter 386A. See Kentucky Statutes 446.010
- Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Cooperative: means a limited cooperative association or an entity organized under any cooperative law of any jurisdiction. See Kentucky Statutes 272A.1-020
- 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.
- Corporation: may extend and be applied to any corporation, company, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Directors: when applied to corporations, includes managers or trustees. See Kentucky Statutes 446.010
- Financial rights: means the right to participate in allocations and distributions as provided in Subchapters 10 and 12 of this chapter, but does not include rights or obligations under a marketing contract governed by Subchapter 7 of this chapter. See Kentucky Statutes 272A.1-020
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Member: means a person that is admitted as a patron member or investor member, or both, in a limited cooperative association. See Kentucky Statutes 272A.1-020
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Partnership: includes both general and limited partnerships. See Kentucky Statutes 446.010
- Transfer: includes an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, and transfer by operation of law. See Kentucky Statutes 272A.1-020
- Trustee: A person or institution holding and administering property in trust.
(a) Breaches an express provision of the organic rules; or
(b) Occurs before the termination of the limited cooperative association and:
1. The person is expelled as a member under subsection (4)(c) or (d) of this section; or
2. In the case of a person that is not an individual, trust other than a business trust, or estate, the person is expelled or otherwise dissociated as a member because it dissolved or terminated in bad faith.
(3) Unless the organic rules otherwise provide, a person that wrongfully dissociates as a member is liable to the limited cooperative association for damages caused by the dissociation. The liability is in addition to any other debt, obligation, or liability of the person to the association.
(4) A member is dissociated from the limited cooperative association as a member when:
(a) The association receives notice in a record of the member’s express will to dissociate as a member, or if the member specifies in the notice an effective date later than the date the association received notice, on that later date;
(b) An event stated in the organic rules as causing the member’s dissociation as a member occurs;
(c) The member is expelled as a member under the organic rules;
(d) The member is expelled as a member by the board of directors because:
1. It is unlawful to carry on the association’s activities with the member as a member;
2. There has been a transfer of all the member’s financial rights in the association, other than:
a. A creation or perfection of a security interest; or
b. A charging order in effect under KRS § 272A.6-050 which has not been foreclosed;
3. The member is a limited liability company, association, or partnership, which has been dissolved, and its business is being wound up;
4. The member is a corporation or cooperative and:
a. The member filed articles of dissolution or the equivalent, or the jurisdiction of formation revoked its charter or right to conduct business;
b. The association sends a notice to the member that it will be expelled as a member for a reason described in subdivision a. of this subparagraph; and
c. Not later than ninety (90) days after the notice was sent under subdivision b. of this subparagraph, the member did not revoke its articles of dissolution or the equivalent, or the jurisdiction of formation did not reinstate the corporation‘s or cooperative’s charter or right to conduct business; or
5. The member is an individual and is adjudged incompetent; (e) In the case of a member who is an individual, the individual dies;
(f) In the case of a member that is a trust or is acting as a member by virtue of being a trustee of a trust, all the trust’s financial rights in the association are distributed;
(g) In the case of a member that is an estate, the estate’s entire financial interest in the association is distributed;
(h) In the case of a member that is not an individual, partnership, limited liability company, cooperative, corporation, trust, or estate, the member is terminated; or
(i) The association’s participation in a merger if, under the plan of merger, the member ceases to be a member.
Effective: July 12, 2012
History: Created 2012 Ky. Acts ch. 160, sec. 85, effective July 12, 2012.