(a) A member of a cooperative is entitled to dissent from and obtain payment of the fair value, as determined under § 43-38-807, of the member’s membership interests in the event of any of the following cooperative actions:
Terms Used In Tennessee Code 43-38-802
Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
Fair value: means the value of the dissenter's membership interest of a cooperative immediately before the effective date of the cooperative action referred to in §. See Tennessee Code 43-38-801
Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
Member: includes a former member when dissenter's rights exist because:(A) The membership of the former member has terminated causing dissolution. See Tennessee Code 43-38-801
Membership interest: means a member's interest in a cooperative consisting of a member's financial rights, a member's right to assign financial rights, a member's governance rights and a member's right to assign governance rights. See Tennessee Code 43-38-103
Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
(1) Consummation of a plan or merger to which the cooperative is a party;(2) Consummation of a sale, lease, transfer, or other disposition of all or substantially all of the property and assets of the cooperative not made in the usual or regular course of the cooperative’s business, but not including a disposition in dissolution described in § 43-38-1009(b), or a disposition pursuant to an order of a court, or a disposition for cash on terms requiring that all or substantially all of the net proceeds of disposition be distributed to the members in accordance with their respective membership interests within one (1) year after the date of disposition;(3) Except as provided in the articles or bylaws in effect when the person becomes a member or placed in the agreement without the opposing vote of the member, an amendment of the articles or bylaws that materially and adversely affects the rights or preferences of the membership interests of the dissenting member because it:
(A) Alters or abolishes a preferential right of the membership interests;(B) Alters or abolishes a preemptive right of the owner of the membership interests to make a contribution;(C) Excludes or limits the right of a member to vote on a matter, or to cumulate votes, except as the right may be excluded or limited through the acceptance of contributions or the marking of contribution agreements pertaining to membership interests with similar or different voting rights; or(D) Establishes or changes the conditions for or consequences of expulsion;(4) An amendment to the articles or bylaws that materially and adversely affects the rights or preferences of the membership interests of the dissenting member because it:
(A) Changes a member’s right to resign or retire; or(B) Alters or abolishes a right in respect of the remedies of the membership interests, including a provision respecting a sinking fund for the redemption or repurchase of membership interests; and(5) Any other cooperative action taken pursuant to a member vote to the extent the articles, the bylaws, or a resolution approved by the members provides that dissenting members are entitled to dissent and obtain payment for their membership interests.(b) A member entitled to dissent and obtain payment for the member’s membership interest under this part may not challenge the cooperative action creating the member’s entitlement unless the action is unlawful or fraudulent with respect to the member or the cooperative.
