§ 43-38-122 — Merger and consolidation

Tennessee § 43-38-122

• Jurisdiction: Tennessee
• Title: 43

Text

(a) Unless otherwise prohibited, cooperatives organized under the laws of this state may merge or consolidate with each other or other business entities organized under the laws of this state or another state by complying with this section or the law of the state where the surviving or new business entity will exist. (b) To initiate a merger or consolidation of a cooperative, a written plan of merger or consolidation shall be prepared by the board or by a committee selected by the board to prepare a plan. The plan shall state: (1) The names of the constituent cooperatives and other business entities; (2) The name of the surviving or new cooperative or other business entity; (3) The manner and basis of converting membership or ownership interests of the constituent cooperatives or business entities into membership or ownership interests in the surviving or new cooperative or business entity; (4) The terms of the merger or consolidation; (5) The proposed effect of the consolidation or merger on the members and patron members of the cooperative; (6) For a consolidation, the plan shall contain the articles of the entity or organizational documents to be filed with the state in which the entity is organized; and (7) Any other provisions required by the laws under which any party to the merger is organized. (c) The following shall apply to notice: (1) The board shall mail a merger or consolidation or otherwise transmit or deliver notice to each member. The notice shall contain: (A) The full text of the plan; and (B) The time and place of the meeting at which the plan will be considered; and (2) A cooperative with more than two hundred (200) members may provide the merger or consolidation notice in the same manner as a regular members' meeting notice. (d) The following shall apply to the adoption of a plan of merger or consolidation: (1) A plan of merger or consolidation is adopted if: (A) The directors recommend the plan of merger or consolidation be approved by the members, unless the directors determine that, because of conflict of interest or due to the special circumstances, it should make no recommendation, in which case the directors shall submit the plan of merger or consolidation to the members of the cooperative for approval without recommendation and, in connection with the submission, shall communicate the basis for its determination that the plan be submitted for approval without any recommendation; (B) A quorum of the members is registered as being present or represented by mail vote at the meeting; and (C) The plan is approved by two-thirds (2/3) of the votes cast, or for a cooperative with articles or bylaws requiring more than two-thirds (2/3) of the votes cast or other conditions for approval, the plan is approved by a proportion of the votes cast or a number of total members as required by the articles or bylaws and the conditions for approval in the articles or bylaws have been satisfied; (2) After the plan has been adopted, articles of merger or consolidation stating the plan and that the plan was adopted according to this chapter shall be signed by the chair, vice-chair, records officer or documents officer of each cooperative merging or consolidating; (3) The articles of merger or consolidation shall be filed in the office of the secretary of state and must set forth: (A) The name, jurisdiction and date of formation or organization of each of the cooperatives or other entities that are a party to the merger; (B) That a plan of merger has been approved and executed by each of the cooperatives and other business entities that are a party to the merger; (C) The name and address of the principal executive office or equivalent thereof, of the surviving or resulting entity into which the other entities will merge; (D) The future effective date or time, which shall be a date or time certain and which shall comply with § 43-38-1109(b) of the merger, if it is not to be effective upon the filing of the plan of merger; (E) That the plan of merger is on file at a place of business of the surviving or resulting entity, and shall state the address thereof; (F) That a copy of the plan of merger will be furnished by the surviving or resulting entity, on request and without cost, to any member of any domestic cooperative or any persons holding an interest in any other entity that is or was a party to the merger; and (G) If the surviving or resulting entity is not a domestic cooperative, a statement that such surviving or resulting entity agrees that it may be served with process in this state in any action, suit or proceeding for the enforcement of any obligation of any entity that is a party to the merger, irrevocably appointing the secretary of state as its agent to accept service of process in any such action, suit or proceeding and specifying the address to which a copy of the process shall be mailed to it by the secretary of state. In the event of service hereunder upon the secretary of state, the procedures set forth in § 43-38-111 shall be applicable, except that the plaintiff in any such action, suit or proceeding shall furnish the secretary of state with the address specified in the certificate of merger provided for in this section and any other address that the plaintiff may elect to furnish, together with copies of such process as required by the secretary of state, and the secretary of state shall notify such surviving or resulting other business entity at all addresses furnished by the plaintiff in accordance with the procedures set forth in § 43-38-111 ; (4) For a merger, the articles of the surviving cooperative subject to this chapter are deemed amended to the extent provided in the articles of merger; and (5) Unless a later date is provided in the plan, the merger or consolidation is effective when the articles of merger or consolidation are filed in the office of the secretary of state. (e) The following shall apply to the effect of a merger: (1) After the effective date, the cooperatives or other business entities that are parties to the plan become a single entity. For a merger, the surviving business entity is the business entity designated in the plan. For a consolidation, the new cooperative or other business entity is the business entity provided for in the plan. Except for the surviving or new business entity, the separate existence of all business entities that are parties to the plan cease on the effective date of the merger or consolidation. The articles of merger as filed with the office of the secretary of state shall act as notice of dissolution and articles of termination for a domestic cooperative that is not the surviving or resulting entity in the merger; (2) The surviving or new business entity possesses all of the rights and property of each of the merged or consolidated business entities and is responsible for and assumes all their obligations and duties. The title to property of the merged or consolidated business entity is vested in the surviving or new business entity without reversion or impairment of title caused by the merger or consolidation. All liens upon any property of any of the merged business entities shall be preserved unimpaired and may be enforced against the surviving or resulting entity to the same extent as if the debts, liabilities and duties had been incurred or contracted by the surviving or resulting party; and (3) The right of a creditor may not be impaired by the merger or consolidation without the creditor's consent. (f) The fee to be paid to the secretary of state for filing articles of merger or consolidation shall conform with § 43-38-1103 .

Legislative History

Acts 2004, ch. 534, § 31.