Kentucky Statutes 272A.6-040 – Security interest and set-off
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(1) A member or transferee may create an enforceable security interest in its financial rights in a limited cooperative association.
(2) Unless the organic rules otherwise provide, a member may not create an enforceable security interest in the member’s governance rights in a limited cooperative association.
(3) The organic rules may provide that a limited cooperative association has a security interest in the financial rights of a member to secure payment of any indebtedness or other obligation of the member to the association. A security interest provided for in the organic rules is enforceable under, and governed by, Article 9 of KRS Chapter
355.
(4) Unless the organic rules otherwise provide, a member may not compel the limited cooperative association to offset financial rights against any indebtedness or obligation owed to the association.
Effective: July 12, 2012
History: Created 2012 Ky. Acts ch. 160, sec. 48, effective July 12, 2012.
(2) Unless the organic rules otherwise provide, a member may not create an enforceable security interest in the member’s governance rights in a limited cooperative association.
Terms Used In Kentucky Statutes 272A.6-040
- Cooperative: means a limited cooperative association or an entity organized under any cooperative law of any jurisdiction. See Kentucky Statutes 272A.1-020
- 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
- Governance rights: means the right to participate in governance of a limited cooperative association. See Kentucky Statutes 272A.1-020
- 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.
(3) The organic rules may provide that a limited cooperative association has a security interest in the financial rights of a member to secure payment of any indebtedness or other obligation of the member to the association. A security interest provided for in the organic rules is enforceable under, and governed by, Article 9 of KRS Chapter
355.
(4) Unless the organic rules otherwise provide, a member may not compel the limited cooperative association to offset financial rights against any indebtedness or obligation owed to the association.
Effective: July 12, 2012
History: Created 2012 Ky. Acts ch. 160, sec. 48, effective July 12, 2012.