The Florida Senate

620.205  Rights of dissenting partners.--

(1)  For purposes of this section, the term:

(a)  "Dissenter" means a partner of a domestic limited partnership who is a recordholder of the partnership interests to which he or she seeks relief as of the date fixed for the determination of partners entitled to notice of a plan of merger, who does not vote such interests in favor of the plan of merger, and who exercises the right to dissent from the plan of merger when and in the manner required by this section.

(b)  "Fair value," with respect to a dissenter's partnership interests, means the value of the partnership interests in the domestic limited partnership that is a party to a plan of merger as of the close of business of the day prior to the effective date of the merger to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the merger, unless such exclusion would be inequitable.

(2)  Each partner of a domestic limited partnership that is a party to a merger shall have the right to be paid the fair value of his or her partnership interests as a dissenter as provided in this section.

(3)  Not later than 20 days after the date on which the notification required by s. 620.202(3) is given to the partners, or if such notification was waived in writing by the dissenter, not later than 20 days after the date of such written waiver, the dissenter shall deliver to the limited partnership a written demand for payment to him or her of the fair value of the interests as to which the dissenter seeks relief that states his or her address, the number and class, if any, of those interests, and, at the election of the dissenter, the amount claimed by him or her as the fair value of the interests. The statement of fair market value by the dissenter, if any, shall constitute an offer by the dissenter to sell the partnership interests to the limited partnership for such amount. A dissenter may dissent as to less than all the partnership interests registered in his or her name. In such event, the dissenter's rights shall be determined as if the partnership interests as to which he or she has dissented and his or her remaining partnership interests were registered in the names of different partners. If the interests as to which a dissenter seeks relief are represented by certificates, the dissenter shall deposit such certificates with the limited partnership simultaneously with the delivery of the written demand for payment. Upon receiving a demand for payment from a dissenter who is a recordholder of uncertificated interests, the limited partnership shall make an appropriate notation of the demand for payment in its records. The limited partnership may restrict the transfer of uncertificated interests from the date the dissenter's written demand for payment is delivered. A written demand for payment served on the domestic limited partnership in which the dissenter is a partner shall constitute service on the surviving entity.

(4)  The written demand for payment required by subsection (3) shall be deemed to be delivered to the limited partnership at the earliest of:

(a)  The date such written demand is received;

(b)  Five days after the date such written demand is deposited in the United States mail addressed to the principal business office of the limited partnership, with postage thereon prepaid;

(c)  The date shown on the return receipt, if such written demand is sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee; or

(d)  The date such written demand is given in accordance with the provisions of the limited partnership's partnership agreement.

(5)  Unless the partnership agreement of the limited partnership in which the dissenter is a partner provides a basis or method for determining and paying the fair value of the interests as to which the dissenter seeks relief, or unless the limited partnership or the surviving entity and the dissenter have agreed in writing as to the fair value of the interests as to which the dissenter seeks relief, the dissenter, the limited partnership, or the surviving entity, within 90 days after the dissenter delivers the written demand for payment to the limited partnership, may file an action in any court of competent jurisdiction in the county in this state where the registered office of the limited partnership is located or was located when the plan of merger was approved by its partners, or in the county in this state in which the principal office of the limited partnership that issued the partnership interests is located or was located when the plan of merger was approved by its partners, requesting a determination of the fair value of the dissenter's partnership interests. The court shall also determine whether each dissenter that is a party to such proceeding, as to whom the limited partnership or the surviving entity requests the court to make such determination, is entitled to receive payment of the fair value for his or her partnership interests. Other dissenters, within the 90-day period after a dissenter delivers a written demand to the partnership, may join such proceeding as plaintiffs or may be joined in any such proceeding as defendants, and any two or more such proceedings may be consolidated. If the limited partnership or surviving entity commences such a proceeding, all dissenters, whether or not residents of this state, other than dissenters who have agreed in writing with the limited partnership or the surviving entity as to the fair value of the partnership interests as to which such dissenters seek relief, shall be made parties to such action as an action against their partnership interests. The limited partnership or the surviving entity shall serve a copy of the initial pleading in such proceeding upon each dissenter who is a party to such proceeding and who is a resident of this state in the manner provided by law for the service of a summons and complaint and upon each such dissenter who is not a resident of this state either by registered or certified mail and publication or in such manner as is permitted by law. The jurisdiction of the court in such a proceeding shall be plenary and exclusive. All dissenters who are proper parties to the proceeding are entitled to judgment against the limited partnership or the surviving entity for the amount of the fair value of their partnership interests as to which payment is sought hereunder. The court may, if it so elects, appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers shall have such power and authority as is specified in the order of their appointment or an amendment thereof. The limited partnership shall pay each dissenter the amount found to be due him or her within 10 days after final determination of the proceedings. Upon payment of the judgment, the dissenter shall cease to have any interest in the partnership interests as to which payment is sought hereunder.

(6)  The judgment may, at the discretion of the court, include a fair rate of interest, to be determined by the court.

(7)  The costs and expenses of any such proceeding shall be determined by the court and shall be assessed against the limited partnership or the surviving entity. However, all or any part of such costs and expenses may be apportioned and assessed as the court deems equitable against any or all of the dissenters who are parties to the proceeding, to whom the limited partnership or the surviving entity has made an offer to pay for the partnership interests, if the court finds that the action of such dissenters in failing to accept such offer was arbitrary, vexatious, or not in good faith. Such expenses shall include reasonable compensation for, and reasonable expenses of, the appraisers, but shall exclude the fees and expenses of counsel for, and experts employed by, any party. If the fair value of the partnership interests, as determined, materially exceeds the amount which the limited partnership or the surviving entity offered to pay therefor, the court in its discretion may award to any dissenter who is a party to the proceeding such amount as the court determines to be reasonable compensation to any attorney or expert employed by the dissenter in the proceeding.

(8)  The right of a dissenter to receive fair value for and the obligation to sell such partnership interests as to which the dissenter seeks relief and the right of the domestic limited partnership or the surviving entity to purchase such interests and the obligation to pay the fair value of such interests shall terminate if:

(a)  The dissenter has not complied with this section, unless the limited partnership or the surviving entity waives in writing such noncompliance;

(b)  The limited partnership abandons the merger or is finally enjoined or prevented from carrying out the merger, or the partners rescind their adoption or approval of the merger;

(c)  The dissenter withdraws his or her demand, with the consent of the limited partnership or the surviving entity; or

(d)1.  The partnership agreement of the domestic limited partnership in which the dissenter was a partner does not provide a basis or method for determining and paying the dissenter the fair value of his or her partnership interests.

2.  The limited partnership or the surviving entity and the dissenter have not agreed upon the fair value of the dissenter's partnership interests.

3.  Neither the dissenter, the limited partnership, nor the surviving entity has filed or is joined in a complaint under subsection (5) within the 90-day period provided in that subsection.

(9)  Unless otherwise provided in the partnership agreement of the domestic limited partnership in which the dissenter was a partner, after the date the dissenter delivers the written demand for payment in accordance with subsection (3) until either the termination of the rights and obligations arising from it or the purchase of the dissenter's partnership interests by the limited partnership or the surviving entity, the dissenter shall be entitled only to payment as provided in this section and shall not be entitled to any other rights accruing from such interests, including voting or distribution rights. If the right to receive fair value is terminated other than by the purchase of the dissenter's partnership interests by the limited partnership or the surviving entity, all rights of the dissenter as a partner of the limited partnership shall be reinstated effective as of the date the dissenter delivered the written demand for payment, including the right to receive any intervening payment or other distribution with respect to the dissenter's interests in the limited partnership, or, if any such rights have expired or any such distribution other than a cash payment has been completed, in lieu thereof at the election of the surviving entity, the fair value thereof in cash as determined by the surviving entity as of the time of such expiration or completion, but without prejudice otherwise to any action or proceeding of the limited partnership that may have been taken by the limited partnership on or after the date the dissenter delivered the written demand for payment.

(10)  A partner who is entitled under this section to demand payment for his or her partnership interests shall not have any right at law or in equity to challenge the validity of any merger that creates his or her entitlement to demand payment hereunder, or to have the merger set aside or rescinded, except with respect to compliance with the provisions of the limited partnership's partnership agreement or if the merger is unlawful or fraudulent with respect to such partner.

(11)  Unless otherwise provided in the partnership agreement of the domestic limited partnership in which the dissenter was a partner, this section does not apply with respect to a plan of merger if, as of the date fixed for the determination of partners entitled to notice of a plan of merger:

(a)  The partnership interests of the limited partnership were held of record by not fewer than 500 partners; or

(b)  The partnership interests were registered on a national securities exchange or quoted on the National Association of Securities Dealers Automated Quotation System.

History.--s. 6, ch. 98-101; s. 36, ch. 99-7.