13.1-740 - Court action. - Virginia Statutes

§ 13.1-740. Court action.

A. If a shareholder makes a demand for payment under § 13.1-739 that remainsunsettled, the corporation shall commence a proceeding within 60 days afterreceiving the payment demand and petition the court to determine the fairvalue of the shares and accrued interest. If the corporation does notcommence the proceeding within the 60-day period, it shall pay in cash toeach shareholder the amount the shareholder demanded pursuant to § 13.1-737plus interest.

B. The corporation shall commence the proceeding in the circuit court of thecity or county where the corporation's principal office, or, if none in theCommonwealth, where its registered office, is located. If the corporation isa foreign corporation without a registered office in the Commonwealth, itshall commence the proceeding in the circuit court of the city or county inthe Commonwealth where the principal office, or, if none in the Commonwealth,where the registered office of the domestic corporation merged with theforeign corporation was located at the time the transaction became effective.

C. The corporation shall make all shareholders, whether or not residents ofthe Commonwealth, whose demands remain unsettled parties to the proceeding asin an action against their shares, and all parties shall be served with acopy of the petition. Nonresidents may be served by registered or certifiedmail or by publication as provided by law.

D. The corporation may join as a party to the proceeding any shareholder whoclaims to have demanded an appraisal but who has not, in the opinion of thecorporation, complied with the provisions of this article. If the courtdetermines that a shareholder has not complied with the provisions of thisarticle, that shareholder shall be dismissed as a party.

E. The jurisdiction of the court in which the proceeding is commenced undersubsection B is plenary and exclusive. The court may appoint one or morepersons as appraisers to receive evidence and recommend a decision on thequestion of fair value. The appraisers shall have the powers described in theorder appointing them, or in any amendment to it. The shareholders demandingappraisal are entitled to the same discovery rights as parties in other civilproceedings. There shall be no right to a jury trial.

F. Each shareholder made a party to the proceeding is entitled to judgment(i) for the amount, if any, by which the court finds the fair value of theshareholder's shares plus interest exceeds the amount paid by the corporationto the shareholder for such shares or (ii) for the fair value plus interestof the shareholder's shares for which the corporation elected to withholdpayment under § 13.1-738.

(Code 1950, §§ 13-85, 13.1-75, 13.1-78; 1956, c. 428; 1968, c. 733; 1972, c.425; 1975, c. 500; 1984, c. 613; 1985, c. 522; 2005, c. 765.)