(a) A cooperative having the primary purpose only or one (1) or more secondary purposes only may otherwise dispose of, lease, mortgage or otherwise encumber all or a substantial portion of its assets and properties that are devoted to and used or useful in pursuance of the primary purpose only or of one (1) or more of its secondary purposes only upon the proposal therefor being first approved and recommended by its board and submitted to the members for their consideration and action at a special member meeting called by the board for that purpose or at a regular annual member meeting, the notice of which shall contain or be accompanied by a copy of the proposed disposition, lease, mortgage or other encumbrance or by an accurate summary explanation thereof. Such proposal shall be approved and authorized if it receives the affirmative votes of as many as, but not fewer than, two-thirds (2/3) of the members voting thereon.
Terms Used In Tennessee Code 65-25-114
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Board: means a cooperative's board of directors or the necessary number thereof to take action. See Tennessee Code 65-25-102
cooperatives: means one (1) or more nonprofit cooperative membership corporations heretofore or hereafter organized under or otherwise subject to this chapter, including corporations transacting business in this state pursuant to §. See Tennessee Code 65-25-102
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Deed: The legal instrument used to transfer title in real property from one person to another.
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: means a person having the right to vote for the directors of a cooperative and upon other matters as provided in this chapter, a cooperative's articles of incorporation or bylaws, and includes each incorporator of a cooperative thereof, and also a husband and wife admitted to joint membership. See Tennessee Code 65-25-102
Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
Substantial portion: means ten percent (10%) or more of the value in dollars of a cooperative's assets and properties as appropriately stated in its books of account. See Tennessee Code 65-25-102
United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(b) A cooperative having both the primary and one (1) or more secondary purposes may otherwise dispose of, lease, mortgage or otherwise encumber all or a substantial portion of its assets and properties devoted to and used or useful in pursuance of one (1) or more secondary purposes upon the proposal therefor being approved and authorized by its board only, unless its bylaws require the approval of the members.(c) Notwithstanding subsections (a) and (b), or in any other law, or a cooperative’s articles of incorporation or bylaws, the board of a cooperative, without authorization or approval of the members thereof, shall have full power and authority to authorize the execution and delivery of a mortgage or mortgages or deed or deeds of trust upon, or the pledging or encumbrancing of, any or all of the assets and properties of the cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues and income therefrom, all upon such terms and conditions as the board shall determine, to secure any indebtedness of the cooperative to the United States or any instrumentality or agency thereof, or to any corporation or financial institution authorized to assist in the credit and financial needs of cooperatives, or to any other source of finance.
