§ 12:1-1436 — Judicial determination of fair value and payment terms for withdrawing

§1-1436. Judicial determination of fair value and payment terms for withdrawing
shareholder's shares
A.(1) If a shareholder's right to withdraw from a corporation is recognized by means
of a notice of acceptance under R.S. 12:1-1435(E), but the notice does not create a contract
under R.S. 12:1-1435(F), the corporation and shareholder shall have sixty days from the
effective date of the notice of acceptance to negotiate the fair value of the shareholder's
shares and the terms under which the corporation is to purchase the shares. Within one year
after the expiration of the sixty-day period, either party may file an action against the other
to determine the fair value of the shares and the terms for the purchase of the shares. Venue
for the action lies in the district court of the parish where the corporation's principal office
or, if none in this state, where its registered office is located.
(2) If neither party files an action to establish the fair value of the shares within the
time period provided in this Subsection, then subject to the terms of any settlement reached
between the parties, the effects of the earlier notices of withdrawal and acceptance under R.S.
12:1-1435 are terminated. The termination of the effects of the earlier notices does not affect
the right of the shareholder to reassert the shareholder's right to withdraw through the filing
of a new notice of withdrawal in accordance with R.S. 12:1-1435(D).
B. If a shareholder's right to withdraw from a corporation is recognized by a
judgment in an action under R.S. 12:1-1435(G), the court shall stay the proceeding for a
period of at least sixty days from the date that the judgment is rendered to allow the
corporation and shareholder to negotiate the fair value and purchase terms for the
withdrawing shareholder's shares, or other terms for the settlement of their dispute. After the
stay expires or is lifted, either party may file a motion to have the court determine the fair
value and terms for the purchase of the shares.
C. The court shall conduct the trial of the action under Subsection A of this Section
or the motion under Subsection B of this Section by summary proceeding.
D. Except as provided in Subsection E of this Section, at the conclusion of the trial
the court shall render final judgment as described in Paragraphs (1) and (2) of this
Subsection:
(1) In favor of the shareholder and against the corporation for the fair value of the
shareholder's shares.
(2) In favor of the corporation and against the shareholder that does both of the
following:
(a) Terminates the shareholder's ownership of shares in the corporation.
(b) Orders the shareholder to deliver to the corporation within thirty days of the date
of the judgment any certificate issued by the corporation for the shares or an affidavit by the
shareholder that the certificate has been lost, stolen, destroyed, or previously delivered to the
corporation.
E. If at the conclusion of the trial the court finds that the corporation has proved that
its payment of the judgment rendered in accordance with Subsection D of this Section would
violate a limitation or requirement as described in R.S. 12:1-1435(I) or cause undue harm to
the corporation or its creditors, the court shall render a final judgment that, by itself or in
conjunction with earlier orders or partial judgments of the court, provides relief as close in
value and effect as feasible to that contemplated by Subsection D of this Section, but
adjusted as necessary to avoid the relevant violation or undue harm.
F. If a withdrawing shareholder fails to deliver the certificate for a share covered by
a judgment rendered as provided in Subsection D or E of this Section, and a third person
presents the certificate to the corporation after the shareholder's ownership of the share is
terminated by the judgment, the shareholder shall indemnify the corporation for any dilution
in value imposed on other shareholders as a result of the corporation's obligation to recognize
the person presenting the certificate as the owner of the shares represented by the certificate.

Legislative History

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2016, No. 442, §1; Acts 2017, No. 57, §1.