§ 18-1055.2 — Proceedings regarding validity of defective corporate

Oklahoma § 18-1055.2

• Jurisdiction: Oklahoma
• Title 18: Corporations

Text

acts and stock. PROCEEDINGS REGARDING VALIDITY OF DEFECTIVE CORPORATE ACTS AND STOCK A. Subject to subsection F of this section, upon application by the corporation, any successor entity to the corporation, any member of the board of directors, any record or beneficial holder of valid stock or putative stock, any record or beneficial holder of valid or putative stock as of the time of a defective corporate act ratified pursuant to Section 9 of this act, or any other person claiming to be substantially and adversely affected by a ratification pursuant to Section 9 of this act, the district court may: 1. Determine the validity and effectiveness of any defective corporate act ratified pursuant to Section 9 of this act; 2. Determine the validity and effectiveness of the ratification of any defective corporate act pursuant to Section 9 of this act; 3. Determine the validity and effectiveness of any defective corporate act not ratified or not ratified effectively pursuant to Section 9 of this act; 4. Determine the validity of any corporate act or transaction and any stock, rights or options to acquire stock; and 5. Modify or waive any of the procedures set forth in Section 9 of this act to ratify a defective corporate act. B. In connection with an action under this section, the district court may: 1. Declare that a ratification in accordance with and pursuant to Section 9 of this act is not effective or shall only be effective at a time or upon conditions established by the court; 2. Validate and declare effective any defective corporate act or putative stock and impose conditions upon such validation by the court; 3. Require measures to remedy or avoid harm to any person substantially and adversely affected by a ratification pursuant to Section 9 of this act or from any order of the court pursuant to this section, excluding any harm that would have resulted if the defective corporate act had been valid when approved or effectuated; 4. Order the Secretary of State to accept an instrument for filing with an effective time specified by the court, which effective time may be prior or subsequent to the time of such order; provided, that the filing date of such instrument shall be determined in accordance with paragraph 4 of subsection C of Section 1007 of Title 18 of the Oklahoma Statutes; 5. Approve a stock ledger for the corporation that includes any stock ratified or validated in accordance with this section or with Section 9 of this act; 6. Declare that shares of putative stock are shares of valid stock or require a corporation to issue and deliver shares of valid stock in place of any shares of putative stock; 7. Order that a meeting of holders of valid stock or putative stock be held and exercise the powers provided to the court under Section 1027 of Title 18 of the Oklahoma Statutes with respect to such a meeting; 8. Declare that a defective corporate act validated by the court shall be effective as of the time of the defective corporate act or at such other time as the court shall determine; 9. Declare that putative stock validated by the court shall be deemed to be an identical share or fraction of a share of valid stock as of the time originally issued or purportedly issued or at such other time as the court shall determine; and 10. Make such other orders regarding such matters as it deems proper under the circumstances. C. Service of the application under subsection A of this section upon the registered agent of the corporation shall be deemed to be service upon the corporation, and no other party need be joined in order for the district court to adjudicate the matter. In an action filed by the corporation, the court may require notice of the action be provided to other persons specified by the court and permit such other persons to intervene in the action. D. In connection with the resolution of matters pursuant to subsections A and B of this section, the district court may consider the following: 1. Whether the defective corporate act was originally approved or effectuated with the belief that the approval or effectuation was in compliance with the provisions of Title 18 of the Oklahoma Statutes, the certificate of incorporation or bylaws of the corporation; 2. Whether the corporation and board of directors has treated the defective corporate act as a valid act or transaction and whether any person has acted in reliance on the public record that such defective corporate act was valid; 3. Whether any person will be or was harmed by the ratification or validation of the defective corporate act, excluding any harm that would have resulted if the defective corporate act had been valid when approved or effectuated; 4. Whether any person will be harmed by the failure to ratify or validate the defective corporate act; and 5. Any other factors or considerations the court deems just and equitable. E. The district court is hereby vested with exclusive jurisdiction to hear and determine all actions brought under this section. F. Notwithstanding any other provision of this section, no action asserting: 1. That a defective corporate act or putative stock ratified in accordance with Section 9 of this act is void or voidable due to a failure of authorization identified in the resolution adopted in accordance with subsection B of Section 9 of this act; or 2. That the district court should declare in its discretion that a ratification in accordance with Section 9 of this act not be effective or be effective only on certain conditions, may be brought after the expiration of one hundred twenty (120) days from the later of the validation effective time and the time notice, if any, that is required to be given pursuant to subsection G of Section 9 of this act is given with respect to such ratification, except that this subsection shall not apply to an action asserting that a ratification was not accomplished in accordance with Section 9 of this act or to any person to whom notice of the ratification was required to have been given pursuant to subsection D or G of Section 9 of this act, but to whom such notice was not given.

Legislative History

Added by Laws 2017, c. 323, § 10, eff. Nov. 1, 2017.