Section 35-7 Dissenters’ Rights
35-7.01 Definitions. As used in this chapter:
(a) “Fair value,” with respect to a dissenter’s shares, means the value of the shares immediately
before the effective date of the corporate action to which the dissenter objects, excluding any
appreciation or depreciation in anticipation of the corporate action unless exclusion would be
inequitable.
(b) “Interest” means interest from the effective date of the corporate action until the date of
payment, at the average rate currently paid by the corporation on its principal bank loans or, if
none, at a rate that is fair and equitable under all the circumstances.
Legislative History-Enacted, 5/19/03, Resolu. 2003-337; Readopted 8/01/06, Resolu. 2006-524.
35-7.02 Right to Dissent.
(a) A shareholder is entitled to dissent from, and obtain payment of the fair value of the
shareholder’s shares in the event of, any of the following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a party (i) if shareholder
approval is required for the merger by Section 35-5.01 of this Code or the Articles of
Incorporation and the shareholder is entitled to vote on the merger, or (ii) if the
corporation is a subsidiary that is merged with its parent under Section 35-5.04 of this
Code;
(2) Consummation of a plan of share exchange to which the corporation is a party as the
corporation whose shares will be acquired, if the shareholder is entitled to vote on the
plan;
(3) Consummation of a sale or exchange of all, or substantially all, of the property of the
corporation other than in the usual and regular course of business, if the shareholder is
entitled to vote on the sale or exchange, including a sale in dissolution, but not including
a sale pursuant to court order or a sale for cash pursuant to a plan by which all or
substantially all of the net proceeds of the sale will be distributed to the shareholders
within 1 year after the date of sale;
(b) A shareholder entitled to dissent and obtain payment for the shareholder’s shares under this
chapter may not challenge the corporate action creating the shareholder’s entitlement unless the
action fails to comply with the procedural requirements imposed by this Code, the Articles of
Incorporation, or the Bylaws, or is fraudulent with respect to the shareholder or the corporation.
(c) The right of a dissenting shareholder to obtain payment of the fair value of the shareholder’s
shares shall terminate upon the occurrence of any 1 of the following events:
(1) The proposed corporate action is abandoned or rescinded;
(2) The shareholder’s demand for payment is withdrawn with the written consent of the
corporation.
Legislative History-Enacted, 5/19/03, Resolu. 2003-337; Readopted 8/01/06, Resolu. 2006-524.
35-7.03 Notice of Dissenters’ Rights.
(a) If proposed corporate action creating dissenters’ rights is submitted to a vote at a shareholders’
meeting, the meeting notice must state that shareholders are or may be entitled to assert
dissenters’ rights under this Code.
(b) If corporate action creating dissenters’ rights is taken without a vote of shareholders, the
corporation, within 10 days after the effective date of such corporate action, shall notify in
writing all shareholders entitled to assert dissenters’ rights that the action was taken and send
them the dissenters’ notice referred to in Section 35-7.05 of this Code.
Legislative History-Enacted, 5/19/03, Resolu. 2003-337; Readopted 8/01/06, Resolu. 2006-524.
35-7.04 Notice of Intent to Demand Payment.
(a) If proposed corporate action creating dissenters’ rights is submitted to a vote at a shareholders’
meeting, a shareholder who wishes to assert dissenters’ rights must:
(1) deliver to the corporation before the vote is taken written notice of the shareholder’s
intent to demand payment for the shareholder’s shares if the proposed action is
effected; and
321
Revised Spokane Law & Order Code, 5/14/2013