This section lets a corporation approve a voluntary sale, lease, exchange, or other disposition of all or substantially all of its assets, with different approval rules depending on solvency, and gives the board some post-approval discretion to abandon the deal.
§247. Voluntary transfer of assets A. A voluntary sale, lease, exchange or other disposition of all or substantially all of the assets of a corporation, including its good will, franchise or other rights, may be authorized by it, in the manner prescribed in this section, upon such terms and conditions as it deems expedient, including an exchange for shares or obligations of another nonprofit, business or foreign corporation. B. If the corporation is not insolvent, such authorization may be given only by the members, by vote of two-thirds (or such lesser proportion, not less than a majority, as the articles may provide) in interest of the voting members present. The notice of the meeting of members at which such authorization is considered shall state such consideration as a purpose of the meeting, and if the corporation has no non-shareholding members, the notice shall also contain, if applicable, the following statement: "Dissenting shareholders who comply with the procedural requirements of the Nonprofit Corporation Law of Louisiana will be entitled to receive payment of the fair cash value of their shares if the transaction to be considered is effected upon approval by less than two-thirds of the corporation's total voting power." If the corporation is insolvent, such authorization may be given by vote of two-thirds of the entire board of directors, approved by the voting members as required by R.S. 12:207(D) if immovable property is involved. C. After such authorization or approval by a vote of members, the board of directors may nevertheless, in its discretion, abandon such sale, lease, exchange or other disposition of assets, subject to the rights of third parties under any contracts relating thereto, without action or approval by the members. D. This section shall not be construed to authorize a conveyance or exchange of assets in fraud of corporate creditors or minority members, or members without voting rights, or in violation of the Bulk Sales Law. E. Nothing in this section is intended to restrict the power of any corporation, without authorization or approval thereof by the members, to sell, lease, exchange or otherwise dispose of any of its movable property if the entire corporate business is not ended thereby, or if some portion of the proceeds of such property are appropriated to the conduct or development of its remaining activities. F. An action or suit to enjoin or set aside a conveyance by a corporation, on the ground that there has not been compliance with the provisions of this section relating to the sale, lease, exchange or other disposition of all or substantially all of the assets of the corporation, must be brought within ninety days after the corporate action purporting to authorize such disposition was taken, and this time limit shall not be subject to suspension on any ground, or to interruption on any ground other than timely suit. G. This section does not apply to mortgages, pledges or other security transactions, which may be authorized by action of the board of directors taken as provided in R.S. 12:224 whether the corporation is solvent or insolvent and whether or not all or substantially all of the assets of the corporation are affected thereby. Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §§20, 21, emerg. eff. June 18, 1970, at 5:05 P.M.