When a conversion takes effect, the converted series succeeds to the converting series’ property, liabilities, and ongoing matters, and former members get only the rights provided in the plan of conversion.
Sec. 101.630. EFFECT OF CONVERSION. When a conversion takes effect: (1) the converting series continues to exist without interruption in the form of the converted series rather than in the form of the converting series; (2) all rights, title, and interests to all property owned by the converting series continues to be owned, subject to any existing liens or other encumbrances on the property, by the converted series in the new form without: (A) reversion or impairment; (B) further act or deed; or (C) any transfer or assignment having occurred; (3) all liabilities and obligations of the converting series continue to be liabilities and obligations of the converted series in the new form without impairment or diminution because of the conversion; (4) the rights of creditors or other parties with respect to or against the previous members associated with the converting series in their capacities as members in existence when the conversion takes effect continue to exist as to those liabilities and obligations and may be enforced by the creditors and obligees as if a conversion had not occurred; (5) a proceeding pending by or against the converting series or by or against any of the converting series' members in their capacities as members may be continued by or against the converted series in the new form and by or against the previous members without a need for substituting a party; (6) the membership interests of the converting series that are to be converted into membership interests of the converted series as provided by the plan of conversion are converted as provided by the plan, and the former members of the converting series are entitled only to the rights provided by the plan of conversion; (7) the amendment to the company agreement under the plan of conversion becomes effective; and (8) if, after the conversion takes effect, a member of the converted series as a member is liable for the liabilities or obligations of the converted series, the member is liable for the liabilities and obligations of the converting series that existed before the conversion took effect only to the extent that the member: (A) agrees in writing to be liable for the liabilities or obligations; (B) was liable, before the conversion took effect, for the liabilities or obligations; or (C) by becoming a member of the converted series, becomes liable under other applicable law for the existing liabilities and obligations of the converted series. Added by Acts 2021, 87th Leg., R.S., Ch. 43 (S.B. 1523), Sec. 1, eff. June 1, 2022.