13.1-741.1 - Limitations on other remedies for fundamental transactions. - Virginia Statutes

§ 13.1-741.1. Limitations on other remedies for fundamental transactions.

A. Except for action taken before the Commission pursuant to § 13.1-614 or asprovided in subsection B, the legality of a proposed or completed corporateaction described in subsection A of § 13.1-730 may not be contested, nor maythe corporate action be enjoined, set aside or rescinded, in a legal orequitable proceeding by a shareholder after the shareholders have approvedthe corporate action.

B. Subsection A does not apply to a corporate action that:

1. Was not authorized and approved in accordance with the applicableprovisions of:

a. Article 11 (§ 13.1-705 et seq.), Article 12 (§ 13.1-715.1 et seq.), orArticle 13 (§ 13.1-723 et seq.);

b. The articles of incorporation or bylaws; or

c. The resolutions of the board of directors authorizing the corporate action;

2. Was procured as a result of fraud, a material misrepresentation, or anomission of a material fact necessary to make statements made, in light ofthe circumstances in which they were made, not misleading;

3. Is an interested transaction, unless it has been authorized, approved orratified by the board of directors in the same manner as is provided insubsection B of § 13.1-691 and has been authorized, approved or ratified bythe shareholders in the same manner as is provided in subsection C of §13.1-691 as if the interested transaction were a director's conflict ofinterests transaction; or

4. Is adopted or taken by less than unanimous consent of the votingshareholders pursuant to § 13.1-657 if:

a. The challenge to the corporate action is brought by a shareholder who didnot consent and as to whom notice of the adoption or taking of the corporateaction was not effective at least 10 days before the corporate action waseffected; and

b. The proceeding challenging the corporate action is commenced within 10days after notice of the adoption or taking of the corporate action iseffective as to the shareholder bringing the proceeding.

C. Any remedial action with respect to corporate action described insubsection A of § 13.1-730 shall not limit the scope of, or be inconsistentwith, any provision of § 13.1-614.

(2007, c. 165; 2008, c. 91.)