After a merger or consolidation, the surviving or new cooperative must offer dissenting members a stated fair-value payment and follow set objection, court-filing, and payment deadlines.
1. Within twenty days after the merger or consolidation is effected, the surviving or new cooperative shall make a written offer to each dissenting member to pay a specified sum deemed by the surviving or new cooperative to be the fair value of that dissenting member’s interest in the old cooperative. This offer shall be accompanied by a balance sheet of the old cooperative as of the latest available date, a profit and loss statement of the old cooperative for the twelve-month period ending on the date of the balance sheet, and a list of the dissenting member’s interests in the old cooperative. If the dissenting member does not agree that the sum stated in the notice represents the fair value of the member’s interest, then the member may file a written objection with the surviving or new cooperative within twenty days after receiving the notice. A dissenting member who fails to file the objection within the twenty-day period is conclusively presumed to have consented to the fair value stated in the notice. 2. If the surviving or new cooperative receives any objections to fair values, then within ninety days after the merger or consolidation is effected, the surviving or new cooperative shall file a petition in district court asking for a finding and determination of the fair value of each type of equity. The action shall be tried as an equitable action. 3. The fair value of a dissenting member’s interest in the old cooperative shall be determined as of the day preceding the merger or consolidation by taking the lesser of either the issue price of the dissenting member’s membership, deferred patronage, and any other interests in the cooperative, or the amount determined by subtracting the old cooperative’s debts from the fair market value of the old cooperative’s assets, dividing the remainder by the total issue price of all memberships, deferred patronage, and all other interests, and then multiplying the quotient from this equation by the total issue price of a dissenting member’s membership, deferred patronage, and other interests. 4. The surviving or new cooperative shall pay to each dissenting member in cash within sixty days after the merger or consolidation the amount paid in cash by the dissenting member for that member’s interest in the old cooperative. The surviving or new cooperative shall pay the remainder of each dissenting member’s fair value in ten annual equal payments. The final payment must be made not later than fifteen years after the merger or consolidation. The value of the deferred patronage or interests issued to evidence deferred patronage shall be considered a liability of the surviving or new cooperative as reflected in the accounts of the surviving or new cooperative until the value of the deferred patronage or interests issued to evidence deferred patronage is paid in full to the dissenting member. A dissenting member who is a natural person who dies before receiving the fair value shall have all of the person’s fair value paid with the same priority as if the person was a member at the time of death. 98 Acts, ch 1152, §40, 69; 2014 Acts, ch 1092, §108 Referred to in §501.615