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2 An act relating to the Florida Business
3 Corporation Act; amending s. 607.1302, F.S.;
4 clarifying a corporate action entitling a
5 shareholder to certain appraisal rights and
6 payments for shares; creating s. 607.1330,
7 F.S.; providing requirements, procedures, and
8 limitations on court actions; providing for
9 entitlement to certain judgments; requiring
10 corporate payments under certain circumstances;
11 amending s. 607.1407, F.S.; revising certain
12 notice requirements for dissolved corporations;
13 revising a procedure to clarify an exemption
14 for certain claims against dissolved
15 corporations being barred; correcting a cross
16 reference; reenacting ss. 607.1106(1)(g) and
17 (2), 607.1107(2)(b), 607.1109(1)(g), and
18 607.1321(1), F.S., relating to effect of merger
19 or share exchange, merger or share exchange
20 with foreign corporations, articles of merger,
21 and notice of intent to demand payment, to
22 incorporate the amendment to s. 607.1302, F.S.,
23 in references thereto; providing an effective
24 date.
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26 Be It Enacted by the Legislature of the State of Florida:
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28 Section 1. Paragraph (e) of subsection (1) of section
29 607.1302, Florida Statutes, is amended to read:
30 607.1302 Right of shareholders to appraisal.--
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1 (1) A shareholder is entitled to appraisal rights, and
2 to obtain payment of the fair value of that shareholder's
3 shares, in the event of any of the following corporate
4 actions:
5 (e) With regard to a class of shares prescribed in the
6 articles of incorporation issued prior to October 1, 2003,
7 including any shares within that class subsequently authorized
8 by amendment, any amendment of the articles of incorporation
9 if the shareholder is entitled to vote on the amendment and if
10 such amendment would adversely affect such shareholder by:
11 1. Altering or abolishing any preemptive rights
12 attached to any of his or her shares;
13 2. Altering or abolishing the voting rights pertaining
14 to any of his or her shares, except as such rights may be
15 affected by the voting rights of new shares then being
16 authorized of any existing or new class or series of shares;
17 3. Effecting an exchange, cancellation, or
18 reclassification of any of his or her shares, when such
19 exchange, cancellation, or reclassification would alter or
20 abolish the shareholder's voting rights or alter his or her
21 percentage of equity in the corporation, or effecting a
22 reduction or cancellation of accrued dividends or other
23 arrearages in respect to such shares;
24 4. Reducing the stated redemption price of any of the
25 shareholder's redeemable shares, altering or abolishing any
26 provision relating to any sinking fund for the redemption or
27 purchase of any of his or her shares, or making any of his or
28 her shares subject to redemption when they are not otherwise
29 redeemable;
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1 5. Making noncumulative, in whole or in part,
2 dividends of any of the shareholder's preferred shares which
3 had theretofore been cumulative;
4 6. Reducing the stated dividend preference of any of
5 the shareholder's preferred shares; or
6 7. Reducing any stated preferential amount payable on
7 any of the shareholder's preferred shares upon voluntary or
8 involuntary liquidation.
9 Section 2. Section 607.1330, Florida Statutes, is
10 created to read:
11 607.1330 Court action.--
12 (1) If a shareholder makes demand for payment under s.
13 607.1326 which remains unsettled, the corporation shall
14 commence a proceeding within 60 days after receiving the
15 payment demand and petition the court to determine the fair
16 value of the shares and accrued interest. If the corporation
17 does not commence the proceeding within the 60-day period, any
18 shareholder who has made a demand pursuant to s. 607.1326 may
19 commence the proceeding in the name of the corporation.
20 (2) The proceeding shall be commenced in the
21 appropriate court of the county in which the corporation's
22 principal office, or, if none, its registered office, in this
23 state is located. If the corporation is a foreign corporation
24 without a registered office in this state, the proceeding
25 shall be commenced in the county in this state in which the
26 principal office or registered office of the domestic
27 corporation merged with the foreign corporation was located at
28 the time of the transaction.
29 (3) All shareholders, whether or not residents of this
30 state, whose demands remain unsettled shall be made parties to
31 the proceeding as in an action against their shares. The
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1 corporation shall serve a copy of the initial pleading in such
2 proceeding upon each shareholder party who is a resident of
3 this state in the manner provided by law for the service of a
4 summons and complaint and upon each nonresident shareholder
5 party by registered or certified mail or by publication as
6 provided by law.
7 (4) The jurisdiction of the court in which the
8 proceeding is commenced under subsection (2) is plenary and
9 exclusive. If it so elects, the court may appoint one or more
10 persons as appraisers to receive evidence and recommend a
11 decision on the question of fair value. The appraisers shall
12 have the powers described in the order appointing them or in
13 any amendment to the order. The shareholders demanding
14 appraisal rights are entitled to the same discovery rights as
15 parties in other civil proceedings. There shall be no right to
16 a jury trial.
17 (5) Each shareholder made a party to the proceeding is
18 entitled to judgment for the amount of the fair value of such
19 shareholder's shares, plus interest, as found by the court.
20 (6) The corporation shall pay each such shareholder
21 the amount found to be due within 10 days after final
22 determination of the proceedings. Upon payment of the
23 judgment, the shareholder shall cease to have any interest in
24 the shares.
25 Section 3. Subsections (2) and (3) of section
26 607.1407, Florida Statutes, are amended to read:
27 607.1407 Unknown claims against dissolved
28 corporation.--A dissolved corporation or successor entity, as
29 defined in s. 607.1406(15), may choose to execute one of the
30 following procedures to resolve payment of unknown claims.
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1 (2) A dissolved corporation or successor entity may,
2 within 10 days after filing of adopting the articles of
3 dissolution with the Department of State, publish a "Notice of
4 Corporate Dissolution." The notice shall appear once a week
5 for 2 consecutive weeks in a newspaper of general circulation
6 in a county in the state in which wherein the corporation has
7 its principal office, if any, or, if none, in a county in the
8 state in which the corporation owns real or personal property.
9 Such newspaper shall meet the requirements as are prescribed
10 by law for such purposes. The notice shall:
11 (a) State the name of the corporation and the date of
12 dissolution;
13 (b) Describe the information that must be included in
14 a claim and provide a mailing address to which the claim may
15 be sent; and
16 (c) State that a claim against the corporation under
17 this subsection will be barred unless a proceeding to enforce
18 the claim is commenced within 4 years after the date of the
19 second consecutive weekly publication filing of the notice
20 authorized by this section.
21 (3) If the dissolved corporation or successor entity
22 complies with subsection (1) or subsection (2), the claim of
23 each of the following claimants is barred unless the claimant
24 commences a proceeding to enforce the claim against the
25 dissolved corporation within 4 years after the filing date of
26 filing the notice with the Department of State or the date of
27 the second consecutive weekly publication, as applicable:
28 (a) A claimant who did not receive written notice
29 under s. 607.1406(9), or whose claim was not provided for
30 under s. 607.1406(10) 607.1456(10), whether such claim is
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1 based on an event occurring before or after the effective date
2 of dissolution.
3 (b) A claimant whose claim was timely sent to the
4 dissolved corporation but on which no action was taken.
5 Section 4. For the purpose of incorporating the
6 amendment made by this act to section 607.1302, Florida
7 Statutes, in references thereto, paragraph (g) of subsection
8 (1) and subsection (2) of section 607.1106, Florida Statutes,
9 are reenacted to read:
10 607.1106 Effect of merger or share exchange.--
11 (1) When a merger becomes effective:
12 (g) The shares (and the rights to acquire shares,
13 obligations, or other securities) of each corporation party to
14 the merger that are to be converted into shares, rights,
15 obligations, or other securities of the surviving or any other
16 corporation or into cash or other property are converted, and
17 the former holders of the shares are entitled only to the
18 rights provided in the articles of merger or to their rights
19 under s. 607.1302.
20 (2) When a share exchange becomes effective, the
21 shares of each acquired corporation are exchanged as provided
22 in the plan of exchange, and the former holders of the shares
23 are entitled only to the exchange rights provided in the
24 articles of share exchange or to their rights under s.
25 607.1302.
26 Section 5. For the purpose of incorporating the
27 amendment made by this act to section 607.1302, Florida
28 Statutes, in references thereto, paragraph (b) of subsection
29 (2) of section 607.1107, Florida Statutes, is reenacted to
30 read:
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1 607.1107 Merger or share exchange with foreign
2 corporations.--
3 (2) Upon the merger becoming effective, the surviving
4 foreign corporation of a merger, and the acquiring foreign
5 corporation in a share exchange, is deemed:
6 (b) To agree that it will promptly pay to the
7 dissenting shareholders of each domestic corporation party to
8 the merger or share exchange the amount, if any, to which they
9 are entitled under s. 607.1302.
10 Section 6. For the purpose of incorporating the
11 amendment made by this act to section 607.1302, Florida
12 Statutes, in references thereto, paragraph (g) of subsection
13 (1) of section 607.1109, Florida Statutes, is reenacted to
14 read:
15 607.1109 Articles of merger.--
16 (1) After a plan of merger is approved by each
17 domestic corporation and other business entity that is a party
18 to the merger, the surviving entity shall deliver to the
19 Department of State for filing articles of merger, which shall
20 be executed by each domestic corporation as required by s.
21 607.0120 and by each other business entity as required by
22 applicable law, and which shall set forth:
23 (g) If the surviving entity is another business entity
24 formed, organized, or incorporated under the laws of any
25 state, country, or jurisdiction other than this state:
26 1. The address, including street and number, if any,
27 of its principal office under the laws of the state, country,
28 or jurisdiction in which it was formed, organized, or
29 incorporated.
30 2. A statement that the surviving entity is deemed to
31 have appointed the Secretary of State as its agent for service
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1 of process in a proceeding to enforce any obligation or the
2 rights of dissenting shareholders of each domestic corporation
3 that is a party to the merger.
4 3. A statement that the surviving entity has agreed to
5 promptly pay to the dissenting shareholders of each domestic
6 corporation that is a party to the merger the amount, if any,
7 to which they are entitled under s. 607.1302.
8 Section 7. For the purpose of incorporating the
9 amendment made by this act to section 607.1302, Florida
10 Statutes, in references thereto, subsection (1) of section
11 607.1321, Florida Statutes, is reenacted to read:
12 607.1321 Notice of intent to demand payment.--
13 (1) If proposed corporate action requiring appraisal
14 rights under s. 607.1302 is submitted to a vote at a
15 shareholders' meeting, or is submitted to a shareholder
16 pursuant to a consent vote under s. 607.0704, a shareholder
17 who wishes to assert appraisal rights with respect to any
18 class or series of shares:
19 (a) Must deliver to the corporation before the vote is
20 taken, or within 20 days after receiving the notice pursuant
21 to s. 607.1320(3) if action is to be taken without a
22 shareholder meeting, written notice of the shareholder's
23 intent to demand payment if the proposed action is
24 effectuated.
25 (b) Must not vote, or cause or permit to be voted, any
26 shares of such class or series in favor of the proposed
27 action.
28 Section 8. This act shall take effect upon becoming a
29 law.
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