Wisconsin Statutes 181.1180 – Restrictions on approval of mergers, interest exchanges, conversions, and domestications
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Terms Used In Wisconsin Statutes 181.1180
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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.
- 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
- Following: when used by way of reference to any statute section, means the section next following that in which the reference is made. See Wisconsin Statutes 990.01
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes all partnerships, associations and bodies politic or corporate. See Wisconsin Statutes 990.01
- Year: means a calendar year, unless otherwise expressed; "year" alone means "year of our Lord". See Wisconsin Statutes 990.01
(1) This section shall apply with respect to a member in connection with a merger, interest exchange, conversion, or domestication of a domestic corporation if the member does not vote for or consent to the transaction and the transaction would do any of the following with respect to the member:
(a) Materially increase the current or potential obligations of the member with respect to any constituent, surviving, acquiring, acquired, converting, converted, domesticating, or domesticated corporation, whether as a result of becoming subject to personal interest holder liability with respect to the entity as a consequence of being an owner of the entity, becoming subject to affirmative or negative obligations under the organizational documents of the entity, becoming subject to tax on the income of the surviving or converted entity, or otherwise.
(b) Treat the member’s interests in the corporation in a manner different from the interests of the same class held by any other member.
(2) If this section applies with respect to a member in connection with the transaction, the corporation must offer to purchase the member’s interest in the corporation as provided in sub. (3). Actual or alleged failure to comply with this section shall not have any impact on, and shall not constitute any basis for any person to challenge, the effectiveness of the transaction, and the member’s sole remedy with respect to such failure shall be to commence an action under sub. (4) and otherwise enforce the member’s rights under this section. In order to accept the corporation’s offer, a member must notify the corporation within 60 days of receipt of the offer. Both the offer and the acceptance may be conditioned upon consummation of the transaction.
(3)
(a) The purchase price of the interest of the member pursuant to this section is the amount that would be distributable to the member if, on the date of the transaction, the assets of the corporation were sold and the corporation were wound up, with the sale price equal to the greater of the corporation’s liquidation value or the value based on a sale of the corporation’s entire activities and affairs as a going concern without the member.
(b) Interest accrues on the purchase price from the date of the transaction to the date of payment. At the option of the corporation, some or all amounts owing, whether or not presently due, from the member to the corporation may be offset against the purchase price.
(c) The corporation shall defend, indemnify, and hold the member harmless against all liabilities of the surviving, acquiring, converted, or domesticated entity, as the case may be, incurred after the transaction, except liabilities incurred by an act of the member.
(d) If no agreement for the purchase of the interest of the member pursuant to this section is reached within 120 days of the date of the transaction, the corporation, or the surviving, acquiring, converted, or domesticated entity, as the case may be, shall pay, or cause to be paid, in money to the member the amount it estimates to be the purchase price and accrued interest, reduced by any offsets under par. (b).
(e) The payment required by par. (d) must be accompanied by all of the following:
1. A statement of the corporation’s assets and liabilities as of the date of the transaction.
2. The latest available corporate balance sheet and income statement, if any.
3. An explanation of how the estimated amount of the payment was calculated.
4. Written notice that the payment is in full satisfaction of the obligation to purchase unless, not later than 120 days after the written notice, the member commences an action to determine the purchase price, any offsets and accrued interest under par. (b), or other terms of the obligation to purchase.
(4) The member may maintain an action against the corporation, pursuant to s. 181.0302 (1), to determine the purchase price of the member’s interest, any offsets and accrued interest under sub. (3) (b), or other terms of the obligation to purchase. The action must be commenced not later than 120 days after the corporation has made payment in accordance with sub. (3) (d) or within one year after written demand for payment if no offer is made in accordance with sub. (2). The court shall determine the purchase price of the member’s interest, any offset due under sub. (3) (b), and accrued interest, and enter judgment for any additional payment or refund. The court may assess reasonable attorney fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously, or not in good faith. The finding may be based on the corporation’s failure to make an offer or payment or to comply with sub. (3).
(5) A member does not give the consent required by sub. (1) merely by consenting to a provision of the bylaws that permits the bylaws to be amended with the consent of fewer than all the members.