Senate Bill sb2718er

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  1                                 

  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.

25  

26  Be It Enacted by the Legislature of the State of Florida:

27  

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;

30  

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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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