65-29-118 - Dissolution.
65-29-118. Dissolution.
(a) A cooperative which has not commenced business may dissolve voluntarily by delivering to the secretary of state articles of dissolution, executed and acknowledged on behalf of the cooperative by a majority of the incorporators, which shall state:
(1) The name of the cooperative;
(2) The address of its principal office;
(3) The date of its incorporation;
(4) That the cooperative has not commenced business;
(5) That the amount, if any, actually paid in, less any part thereof disbursed for necessary expenses of the cooperative, has been returned to those entitled thereto and that all easements shall have been released to the grantors;
(6) That no debt of the cooperative remains unpaid; and
(7) That a majority of the incorporators elect that the cooperative be dissolved. Such articles of dissolution shall be submitted to the secretary of state for filing as provided in this chapter.
(b) A cooperative which has commenced business may dissolve voluntarily and wind up its affairs in the following manner:
(1) (A) The board of directors shall first recommend that the cooperative be dissolved voluntarily and thereafter the proposition that the cooperative be dissolved shall be submitted to the members of the cooperative at any annual or special meeting, the notice of which shall set forth such proposition. The proposed voluntary dissolution shall be deemed to be approved upon the affirmative vote of not less than a majority of all the members of the cooperative.
(B) Notwithstanding the provisions of this section to the contrary, in any cooperative organized under this chapter which provides service in five (5) or more counties, including a county containing and physically divided by a United States government corps of engineers dam and reservoir project of thirty-four thousand (34,000) acres or more, and which serves less than twenty thousand (20,000) subscribers as of April 15, 1986, any election to voluntarily dissolve such cooperative shall be held on voting machines and under the supervision of the election commission. The voting machines for any such election shall remain open for nine (9) full hours from eight o'clock a.m. (8:00 a.m.) until five o'clock p.m. (5:00 p.m.) Any election contest pursuant to this subdivision (b)(1)(B) shall be filed and tried by the criminal court of the county where the election occurs. The board of directors is hereby authorized to contract with any county election commission, or the employees thereof, affected by the terms of this subdivision (b)(1)(B) for the purpose of holding an election pursuant to the provisions of this subdivision (b)(1)(B). Any election as to whether to voluntarily dissolve any such cooperative shall also be conducted at an annual or special meeting that is held on a Saturday. For any such election to be held on or after September 1, 2000, notice of such meeting shall be published once a week for two (2) successive weeks in a newspaper of general circulation in each county served by the cooperative at least three (3) weeks prior to the meeting at which the election will be conducted. The results of any such election shall be announced as immediately as possible after the voting machines close at five o'clock p.m. (5:00 p.m.)
(2) Upon such approval, a certificate of election to dissolve, hereinafter designated the certificate, shall be executed and acknowledged on behalf of the cooperative by its president or vice president, and its corporate seal shall be fixed thereto and attested by its secretary. The certificate shall state:
(A) The name of the cooperative;
(B) The address of its principal office;
(C) The names and addresses of its directors; and
(D) The total number of members of the cooperative and the number of members who voted for and against the voluntary dissolution of the cooperative.
The president or vice president executing the certificate shall also make and annex thereto an affidavit stating that there was compliance with the provisions of this subsection (b). Such certificate and affidavit shall be submitted to the secretary of state for filing as provided in this chapter;
(3) Upon the filing of the certificate and affidavit by the secretary of state, the cooperative shall cease to carry on its business except insofar as may be necessary for the winding up thereof, but its corporate existence shall continue until articles of dissolution have been filed by the secretary of state;
(4) After the filing of the certificate and affidavit by the secretary of state, the board of directors shall immediately cause notice of the winding up proceedings to be mailed to each known creditor and claimant and to be published once a week for two (2) successive weeks in a newspaper of general circulation in the county in which the principal office of the cooperative is located;
(5) The board of directors shall wind up and settle the affairs of the cooperative, collect sums owing to it, liquidate its property and assets, pay and discharge its debts, obligations and liabilities, other than those to patrons arising by reason of their patronage, and do all other things required to wind up its business, and after paying or discharging or adequately providing for the payment or discharge of all its debts, obligations and liabilities, other than those to patrons arising by reason of their patronage, shall distribute any remaining sums, first, to patrons holding unpaid equity certificates, second, to patrons for the pro rata return of all amounts standing to their credit by reason of their patronage, and third, to members for the pro rata repayment of membership fees. Any sums then remaining shall be distributed among its members and former members in proportion to their patronage.
(6) When all debts, liabilities and obligations of the cooperative have been paid and discharged or adequate provision shall have been made therefor, and all of the remaining property and assets of the cooperative shall have been distributed to the members pursuant to the provisions of this section, the board of directors shall authorize the execution of articles of dissolution which shall thereupon be executed and acknowledged on behalf of the cooperative by its president or vice president, and its corporate seal shall be affixed thereto and attested by its secretary. Such articles of dissolution shall recite in the caption that they are executed pursuant to this chapter and shall state:
(A) The name of the cooperative;
(B) The address of the principal office of the cooperative;
(C) That the cooperative has heretofore delivered to the secretary of state a certificate of election to dissolve and the date on which the certificate was filed by the secretary of state in the records of the office of the secretary of state;
(D) That all debts, obligations and liabilities of the cooperative have been paid and discharged or that adequate provision has been made for such payment or discharge;
(E) That all the remaining property and assets of the cooperative have been distributed among the members in accordance with the provisions of this section; and
(F) That there are no actions or suits pending against the cooperative.
The president or vice president executing the articles of dissolution shall also make and annex thereto an affidavit stating that there has been compliance with the provisions of this subsection (b). Such articles of dissolution and affidavit, accompanied by proof of the publication required in this subsection (b), shall be submitted to the secretary of state for filing as provided in this chapter.
[Acts 1961, ch. 330, § 18; T.C.A., § 65-2918; Acts 2000, ch. 575, § 1.]