RS 12:72 Shareholders' preemptive rights - Louisiana Statutes

§72.  Shareholders' preemptive rights

A.  Shareholders shall have only such preemptive rights as may be provided in the articles.  If the articles provide simply that "shareholders shall have preemptive rights", then:

(1)  Each holder of shares having voting rights shall, upon issuance for cash of shares having voting rights, have a preemptive right, during a reasonable period to be fixed by the board of directors which need not exceed fifteen days after the giving or mailing of written notice to him of the terms and conditions on which such right is exercisable, to subscribe, at such price and upon such terms as may be fixed in the manner provided in R.S. 12:52, for such proportion of the shares to be issued, as the number of shares having voting rights held by him bears to the total number of shares having voting rights then outstanding.  

(2)  A shareholder shall have no preemptive right to subscribe for shares:

(a)  Which are to be issued for consideration other than cash.  

(b)  Which are to be issued to satisfy conversion or option rights.  

(c)  Which are treasury shares.  

(d)  Which are issued pursuant to a plan of a type authorized by R.S. 12:41(B)(9)(e).  

(3)  Shares which have been offered to shareholders having a preemptive right at a price or upon terms duly fixed, and which have not been subscribed for by them within the period fixed by the board of directors, may thereafter, for one year following the end of such period, be issued or sold to, or subjected to rights or options in favor of, any other person or persons at a price not less than that at which they were offered to such shareholders.  

B.(1)  Any action against a corporation or any of its directors or officers based upon, or arising out of, violation of the preemptive rights of its shareholders as provided in its articles of incorporation, this Chapter, or otherwise, shall be brought within five years from the date of the issuance of the shares to which such preemptive rights applied and this time limit shall not be subject to suspension on any ground, nor to interruption except by timely suit.  

(2)  This Subsection shall be applied both retrospectively and prospectively; however, any action for which the time period for bringing the action would otherwise be shortened by this Subsection may be brought until the earlier of the date six months from June 23, 1991, which six-month period shall not be subject to suspension on any ground, nor to interruption except by timely suit, or the date on which such rights would have prescribed under applicable law in effect prior to June 23, 1991, and any such suit not instituted within that time and any claims relating thereto shall be forever barred.  

Acts 1968, No. 105, §1; Acts 1991, No. 44, §1, eff. June 23, 1991.