Louisiana Revised Statutes 12:1-1107 – Effect of merger or share exchange
Terms Used In Louisiana Revised Statutes 12:1-1107
- Appraisal: A determination of property value.
- Contract: A legal written agreement that becomes binding when signed.
- 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.
- 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.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Merger: means a business combination pursuant to La. See Louisiana Revised Statutes 12:1-1101
- 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.
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
- Service of process: The service of writs or summonses to the appropriate party.
- Share exchange: means a business combination pursuant to La. See Louisiana Revised Statutes 12:1-1101
A. When the merger becomes effective, all of the following shall apply:
(1) The corporation or eligible entity that is designated in the plan of merger as the survivor continues or comes into existence, as the case may be.
(2) The separate existence of every corporation or eligible entity that is merged into the survivor ceases.
(3) All property owned by, and every contract right possessed by, each corporation or eligible entity that merges into the survivor is vested in the survivor without any transfer, assignment, reversion or impairment.
(4) All liabilities of each corporation or eligible entity that is merged into the survivor are vested in the survivor.
(5) The name of the survivor may, but need not be, substituted in any pending proceeding for the name of any party to the merger whose separate existence ceased in the merger.
(6) The articles of incorporation or organic documents of the survivor are amended to the extent provided in the plan of merger.
(7) The articles of incorporation or organic documents of a survivor that is created by the merger become effective.
(8) The shares of each corporation that is a party to the merger, and the interests in an eligible entity that is a party to a merger, that are to be converted under the plan of merger into shares, eligible interests, obligations, rights to acquire securities, other securities, or eligible interests, or into cash, other property, or any combination of the foregoing, are converted, and the former holders of such shares or eligible interests are entitled only to the rights provided to them in the plan of merger or to any rights they may have under Part 13 of this Chapter or the organic law of the eligible entity.
(9) The survivor possesses all the rights, licenses, privileges, and franchises possessed by each of the parties to the merger, except that the survivor does not possess any right, license, privilege, or franchise that the survivor is ineligible to possess or to exercise or that does not survive a merger because of a provision to that effect in the law or administrative rules under which the right, license, privilege, or franchise is held at the time of the merger.
B. When a share exchange becomes effective, the shares of each domestic corporation that are to be exchanged for shares or other securities, eligible interests, obligations, rights to acquire shares, other securities or eligible interests, or for cash, other property, or any combination of the foregoing, are entitled only to the rights provided to them in the plan of share exchange or to any rights they may have under Part 13 of this Chapter.
C. A person who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of any entity as a result of a merger or share exchange shall have owner liability only to the extent provided in the organic law of the entity and only for those debts, obligations, and liabilities that arise after the effective time of the articles of merger or share exchange.
D. Upon a merger becoming effective, a foreign corporation, or a foreign eligible entity, that is the survivor of the merger remains both of the following:
(1) Obligated under the laws of this state to pay promptly the amount, if any, to which shareholders of each domestic corporation who exercise appraisal rights are entitled under Part 13 of this Chapter.
(2) Subject to the personal jurisdiction of the courts of this state in accordance with La. Rev. Stat. 13:3201, and to service of process in accordance with law.
E. The effect of a merger or share exchange on the owner liability of a person who had owner liability for some or all of the debts, obligations, or liabilities of a party to the merger or share exchange shall be as follows:
(1) The merger or share exchange does not discharge any owner liability under the organic law of the entity in which the person was a shareholder or interest holder to the extent any such owner liability arose before the effective time of the articles of merger or share exchange.
(2) The person shall not have owner liability under the organic law of the entity in which the person was a shareholder or interest holder prior to the merger or share exchange for any debt, obligation, or liability that arises after the effective time of the articles of merger or share exchange.
(3) The provisions of the organic law of any entity for which the person had owner liability before the merger or share exchange shall continue to apply to the collection or discharge of any owner liability preserved by Paragraph (E)(1) of this Section, as if the merger or share exchange had not occurred.
(4) The person shall have whatever rights of contribution from other persons are provided by the organic law of the entity for which the person had owner liability with respect to any owner liability preserved by Paragraph (E)(1) of this Section, as if the merger or share exchange had not occurred.
F. For purposes of service of process under Paragraph (D)(2) of this Section, a foreign eligible entity that is a survivor of a merger may be served in accordance with the rules applicable to service of process on a foreign corporation, as if both of the following conditions existed:
(1) The survivor were a foreign corporation.
(2) Each of the following persons were a director of that corporation:
(a) A general partner if the survivor is a partnership of any kind.
(b) A member if the survivor is a member-managed limited liability company.
(c) A manager if the survivor is a manager-managed limited liability company.
(d) A person holding managerial authority in the survivor, regardless of the form of the surviving entity, that is similar to that of an officer or director of a domestic business corporation.
Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.