65-25-214 - Other disposition, lease or encumbrance of assets and properties. - Tennessee Statutes

65-25-214. Other disposition, lease or encumbrance of assets and properties.

(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.

(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 any provision contained in subsections (a) and (b), or in any other provision of law, or in 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.

[Acts 1988, ch. 689, § 2.]