Arizona Laws 29-2306. Effect of interest exchange
A. When an interest exchange becomes effective:
Terms Used In Arizona Laws 29-2306
- Acquired entity: means an entity in which all of one or more classes or series of interests are acquired in an interest exchange. See Arizona Laws 29-2102
- Acquiring entity: means the entity that acquires all of one or more classes or series of interests of the acquired entity in an interest exchange. See Arizona Laws 29-2102
- Appraisal: A determination of property value.
- Entity: means any of the following:
(a) A corporation. See Arizona Laws 29-2102
- Governing statute: means , collectively, the statute or statutes governing the internal affairs of an entity. See Arizona Laws 29-2102
- Governor: means a person by or under whose authority the powers of an entity are exercised and under whose direction the business and affairs of the entity are managed pursuant to the governing statute and organizational documents of the entity. See Arizona Laws 29-2102
- Interest: means a governance interest or a transferable interest, including a share or membership in a corporation. See Arizona Laws 29-2102
- Interest exchange: means a transaction authorized by article 3 of this chapter. See Arizona Laws 29-2102
- Interest holder: means a direct holder of an interest. See Arizona Laws 29-2102
- Interest holder liability: means :
(a) Personal liability for an obligation of an entity that is imposed on a person either:
(i) Solely by reason of the status of the person as an interest holder. See Arizona Laws 29-2102
- Organizational documents: means the public organizational document and private organizational documents of an entity. See Arizona Laws 29-2102
- Person: means an individual, a corporation, an estate, a trust, a partnership, a limited liability company, a business or similar trust, an association, a joint venture, a public corporation, a government, a governmental subdivision, agency or instrumentality or any other legal or commercial entity. See Arizona Laws 29-2102
- Plan: means a plan of merger, interest exchange, conversion, domestication or division. See Arizona Laws 29-2102
- Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. See Arizona Laws 29-2102
- Statute: A law passed by a legislature.
1. The interests in the acquired entity that are the subject of the interest exchange cease to exist or are converted or exchanged as provided in the plan of interest exchange and the interest holders of those interests are entitled only to the rights provided to them under the plan of interest exchange and to any appraisal rights they have under section 29-2109 and the acquired entity‘s governing statute.
2. The acquiring entity becomes the interest holder of the interests in the acquired entity as provided in the plan of interest exchange.
3. The public organizational document, if any, of the acquired entity is amended if and to the extent provided in the statement of interest exchange.
4. The private organizational documents of the acquired entity that are to be in a record, if any, are amended if and to the extent provided in the plan of interest exchange.
B. Except as provided in the plan of interest exchange or in the governing statute or organizational documents of the acquired entity, the interest exchange does not give rise to any rights that an interest holder, governor or third party would otherwise have on a dissolution, liquidation or winding up of the acquired entity.
C. When an interest exchange becomes effective, a person that did not have interest holder liability with respect to the acquired entity and that becomes subject to interest holder liability with respect to the domestic acquiring entity as a result of the interest exchange has interest holder liability only to the extent provided by the governing statute or organizational documents of the domestic acquiring entity, and then only for those obligations that arise after the interest exchange becomes effective.
D. When an interest exchange becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic acquired entity with respect to which the person had interest holder liability is as follows:
1. The interest exchange does not discharge any interest holder liability under the governing statute or organizational documents of the domestic acquired entity to the extent that the interest holder liability arose before the interest exchange became effective.
2. The person does not have interest holder liability under the governing statute or organizational documents of the domestic acquired entity for any obligation that arises after the interest exchange becomes effective.
3. The governing statute and organizational documents of the domestic acquired entity continue to apply to the release, collection or discharge of any interest holder liability preserved under paragraph 1 of this subsection as if the interest exchange had not occurred.
4. The person has the same rights of contribution from any other person as are provided by the governing statute or organizational documents of the domestic acquired entity with respect to any interest holder liability preserved under paragraph 1 of this subsection as if the interest exchange had not occurred.