Kentucky Statutes 271B.13-020 – Right to dissent
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(1) A shareholder shall be entitled to dissent from, and obtain payment of the fair value of his shares in the event of, any of the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a party:
1. If shareholder approval is required for the merger by KRS
271B.11-030 or the articles of incorporation and the shareholder is entitled to vote on the merger; or
2. If the corporation is a subsidiary that is merged with its parent under
KRS § 271B.11-040;
(b) Consummation of a plan of share exchange to which the corporation is a party as the corporation whose shares will be acquired, if the shareholder is entitled to vote on the plan;
(c) Consummation of a sale or exchange of all, or substantially all, of the property of the corporation other than in the usual and regular course of business, if the shareholder is entitled to vote on the sale or exchange, including a sale in dissolution but not including a sale pursuant to court order or a sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the shareholders within one (1) year after the date of sale;
(d) Consummation of a plan of conversion of the corporation into a limited liability company or statutory trust;
(e) An amendment of the articles of incorporation that materially and adversely affects rights in respect of a dissenter‘s shares because it:
1. Alters or abolishes a preferential right of the shares to a distribution or in dissolution;
2. Creates, alters, or abolishes a right in respect of redemption, including a provision respecting a sinking fund for the redemption or repurchase of the shares;
3. Excludes or limits the right of the shares to vote on any matter other than a limitation by dilution through issuance of shares or other securities with similar voting rights;
4. Reduces the number of shares owned by the shareholder to a fraction of a share, if the fractional share so created is to be acquired for cash under KRS § 271B.6-040; or
5. In a public benefit corporation, changes the public benefit provisions;
(f) Any transaction subject to the requirements of KRS § 271B.12-210 or exempted by KRS § 271B.12-220(2);
(g) Any election by a corporation to become a public benefit corporation or pursuant to the merger of a corporation with and into a public benefit corporation; or
(h) Any corporate action taken pursuant to a shareholder vote to the extent the articles of incorporation, bylaws, or a resolution of the board of directors provides that voting or nonvoting shareholders are entitled to dissent and obtain payment for their shares.
(2) A shareholder entitled to dissent and obtain payment for his shares under this chapter shall not challenge the corporate action creating his entitlement except by an application for injunctive relief prior to the consummation of the corporate action.
Effective:June 29, 2017
History: Amended 2017 Ky. Acts ch. 28, sec. 8, effective June 29, 2017. — Amended 2015 Ky. Acts ch. 34, sec. 11, effective June 24, 2015. — Amended
2012 Ky. Acts ch. 81, sec. 93, effective July 12, 2012. — Repealed and reenacted 2010 Ky. Acts ch. 51, sec. 67, effective July 15, 2010. — Amended
2007 Ky. Acts ch. 137, sec. 67, effective June 26, 2007. — Created 1988 Ky. Acts ch. 23, sec. 124, effective January 1, 1989.
Legislative Research Commission Note (7/15/2010). 2010 Ky. Acts ch. 51, sec.
183, provides, “The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section.”
(a) Consummation of a plan of merger to which the corporation is a party:
Terms Used In Kentucky Statutes 271B.13-020
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Articles of incorporation: include amended and restated articles of incorporation and articles of merger. See Kentucky Statutes 271B.1-400
- Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- 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: means the issuer of the shares held by a dissenter, except that in the case of a merger where the issuing corporation is not the surviving corporation, then, after consummation of the merger, "corporation" shall mean the surviving corporation. See Kentucky Statutes 271B.13-010
- Directors: when applied to corporations, includes managers or trustees. See Kentucky Statutes 446.010
- Dissenter: means a shareholder who is entitled to dissent from corporate action under KRS §. See Kentucky Statutes 271B.13-010
- Distribution: means a direct or indirect transfer of money or other property (except its own shares) or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. See Kentucky Statutes 271B.1-400
- Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
- Public benefit: means a positive effect or reduction of negative effects on one (1) or more categories of persons, entities, communities, or interests other than stockholders in their capacities as stockholders. See Kentucky Statutes 271B.1-400
- Public benefit corporation: means a for-profit corporation that is intended to produce a public benefit and to operate in a responsible manner, balancing the stockholders' pecuniary interests, the best interests of those materially affected by the corporation's conduct, and the public benefit identified in its articles of incorporation. See Kentucky Statutes 271B.1-400
- 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.
- Share: means the unit into which the proprietary interests in a corporation are divided. See Kentucky Statutes 271B.1-400
- Shareholder: means the record shareholder or the beneficial shareholder. See Kentucky Statutes 271B.13-010
- Year: means calendar year. See Kentucky Statutes 446.010
1. If shareholder approval is required for the merger by KRS
271B.11-030 or the articles of incorporation and the shareholder is entitled to vote on the merger; or
2. If the corporation is a subsidiary that is merged with its parent under
KRS § 271B.11-040;
(b) Consummation of a plan of share exchange to which the corporation is a party as the corporation whose shares will be acquired, if the shareholder is entitled to vote on the plan;
(c) Consummation of a sale or exchange of all, or substantially all, of the property of the corporation other than in the usual and regular course of business, if the shareholder is entitled to vote on the sale or exchange, including a sale in dissolution but not including a sale pursuant to court order or a sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the shareholders within one (1) year after the date of sale;
(d) Consummation of a plan of conversion of the corporation into a limited liability company or statutory trust;
(e) An amendment of the articles of incorporation that materially and adversely affects rights in respect of a dissenter‘s shares because it:
1. Alters or abolishes a preferential right of the shares to a distribution or in dissolution;
2. Creates, alters, or abolishes a right in respect of redemption, including a provision respecting a sinking fund for the redemption or repurchase of the shares;
3. Excludes or limits the right of the shares to vote on any matter other than a limitation by dilution through issuance of shares or other securities with similar voting rights;
4. Reduces the number of shares owned by the shareholder to a fraction of a share, if the fractional share so created is to be acquired for cash under KRS § 271B.6-040; or
5. In a public benefit corporation, changes the public benefit provisions;
(f) Any transaction subject to the requirements of KRS § 271B.12-210 or exempted by KRS § 271B.12-220(2);
(g) Any election by a corporation to become a public benefit corporation or pursuant to the merger of a corporation with and into a public benefit corporation; or
(h) Any corporate action taken pursuant to a shareholder vote to the extent the articles of incorporation, bylaws, or a resolution of the board of directors provides that voting or nonvoting shareholders are entitled to dissent and obtain payment for their shares.
(2) A shareholder entitled to dissent and obtain payment for his shares under this chapter shall not challenge the corporate action creating his entitlement except by an application for injunctive relief prior to the consummation of the corporate action.
Effective:June 29, 2017
History: Amended 2017 Ky. Acts ch. 28, sec. 8, effective June 29, 2017. — Amended 2015 Ky. Acts ch. 34, sec. 11, effective June 24, 2015. — Amended
2012 Ky. Acts ch. 81, sec. 93, effective July 12, 2012. — Repealed and reenacted 2010 Ky. Acts ch. 51, sec. 67, effective July 15, 2010. — Amended
2007 Ky. Acts ch. 137, sec. 67, effective June 26, 2007. — Created 1988 Ky. Acts ch. 23, sec. 124, effective January 1, 1989.
Legislative Research Commission Note (7/15/2010). 2010 Ky. Acts ch. 51, sec.
183, provides, “The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section.”