RS 12:121 Voluntary transfer of corporate assets - Louisiana Statutes

PART XII.  TRANSFERS OF CORPORATE ASSETS

§121.  Voluntary transfer of corporate assets

A.  A voluntary sale, lease, exchange or other disposition of all or substantially all of the assets of a corporation, including its good will, franchise or other rights, may be authorized by it, in the manner prescribed in this section, upon such terms and conditions as it deems expedient, including an exchange for securities of another corporation or foreign corporation.  

B.  If the corporation is not insolvent, such authorization may be given only by the shareholders, by vote of at least two-thirds of the voting power present (or by such greater or lesser proportion, not less than a majority, of the voting power present or of the total voting power, as the articles may require).  The notice of the meeting of shareholders at which such authorization is considered shall state such consideration as a purpose of the meeting, and shall also contain, if applicable the following statement: "Dissenting shareholders who comply with the procedural requirements of the Business Corporation Law of Louisiana will be entitled to receive payment of the fair cash value of their shares if the transaction to be considered is effected upon approval by less than eighty per cent of the corporation's total voting power." If the corporation is insolvent, such authorization may be given by vote of two-thirds of the entire board of directors.  

C.  After such authorization by a vote of shareholders, the board of directors may nevertheless, in its discretion, abandon such sale, lease, exchange or other disposition of assets, subject to the rights of third parties under any contracts relating thereto, without action or approval by shareholders.  

D.  This section shall not be construed to authorize a conveyance or exchange of assets in fraud of corporate creditors or minority shareholders, or shareholders without voting rights, or in violation of the Bulk Sales Law.

E.  Nothing in this section is intended to restrict the power of any corporation, without authorization thereof by the shareholders, to sell, lease, exchange or otherwise dispose of any of its property if the entire corporate business is not ended thereby, or if some portion of the proceeds of such property is appropriated to the conduct or development of its remaining business.  

F.  An action or suit to enjoin or set aside a conveyance by a corporation, on the ground that there has not been compliance with the provisions of this section relating to the sale, lease, exchange or other disposition of all or substantially all of the assets of the corporation, must be brought within ninety days after the corporate action purporting to authorize such disposition was taken, and this time limit shall not be subject to suspension on any ground, nor to interruption except by timely suit.  

G.  This section does not apply to mortgages, pledges or other security transactions, which may be authorized by action of the board of directors taken as provided in R.S. 12:81 whether the corporation is solvent or insolvent and whether or not all or substantially all of the assets of the corporation are affected thereby.  

Acts 1968, No. 105, §1; Acts 1970, No. 50, §§10, 11, emerg. eff. June 18, 1970, at 5:05 P.M; Acts 1990, No. 849, §1, eff. for taxable years after Dec. 31, 1989.