55-457 - Merger or consolidation of cooperatives.
§ 55-457. Merger or consolidation of cooperatives.
A. Any two or more cooperatives, by agreement of the proprietary lessees asprovided in subsection B, may be merged or consolidated into a singlecooperative. In the event of a merger or consolidation, unless the agreementotherwise provides, the resultant cooperative is, for all purposes, the legalsuccessor of all of the preexisting cooperatives. The operations andactivities of all associations of the preexisting cooperatives shall bemerged or consolidated into a single association which shall hold all powers,rights, obligations, assets and liabilities of all preexisting associations.
B. An agreement of two or more cooperatives to merge or consolidate pursuantto subsection A must be evidenced by an agreement prepared, executed,recorded and certified by the president of the association of each of thepreexisting cooperatives following approval by proprietary lessees ofcooperative interests to which are allocated the percentage of votes in eachcooperative required to terminate that cooperative. Any such agreement mustbe recorded in every city or county in which a portion of the cooperative islocated and is not effective until recorded.
C. Every merger or consolidation agreement must provide for the reallocationof the allocated interests in the new association among the cooperativeinterests of the resultant cooperative either (i) by stating thereallocations or the formulas upon which they are based or (ii) by statingthe percentage of overall allocated interest of the new cooperative which areallocated to all of the cooperative interests comprising each of thepreexisting cooperatives and providing that the portion of the percentagesallocated to each cooperative interest formerly comprising a part of thepreexisting cooperative must be equal to the percentages of allocatedinterests allocated to that cooperative interest by the declaration of thepreexisting cooperative.
(1982, c. 277.)