(a) Except as provided in subsection (b), the validity of a cooperative‘s action may not be challenged on the ground that the cooperative lacks or lacked the power to act.

Terms Used In Tennessee Code 43-38-116

  • Cooperative: means an association organized under this title conducting business on a cooperative plan as provided under this chapter. See Tennessee Code 43-38-103
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Member: means a person or entity reflected on the books of the cooperative as the owner of governance rights of a membership interest of the cooperative and includes patron and nonpatron members. See Tennessee Code 43-38-103
  • Reporter: Makes a record of court proceedings and prepares a transcript, and also publishes the court's opinions or decisions (in the courts of appeals).
  • Representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
  • Trustee: A person or institution holding and administering property in trust.
(b) A cooperative power to act may be challenged in a proceeding by:

(1) A member against the cooperative to enjoin the act;
(2) The cooperative directly, derivatively, or through a receiver, trustee, or other legal representative, against an incumbent or former director, officer, employee or agent of the cooperative; or
(3) The attorney general and reporter under § 43-38-1017.
(c) In a member’s proceeding under subdivision (b)(1) to enjoin an unauthorized cooperative act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss, other than anticipated profits, suffered by the cooperative or another party because of enjoining the unauthorized act.
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