30-29-1107. EFFECT OF MERGER OR SHARE EXCHANGE. (a) Notwithstanding the provisions of sections 30-22-206(c) and (d) and 30-22-306(c) and (d), Idaho Code, and except as otherwise provided in the articles of incorporation of a domestic corporation or the organic law governing or organic rules of a foreign corporation or a domestic or foreign eligible entity, the effect of a merger or share exchange on interest holder liability is as follows:

(1) A person who becomes subject to new interest holder liability in respect of an entity as a result of a merger or share exchange shall have that new interest holder liability only in respect of interest holder liabilities that arise after the merger or share exchange becomes effective.

(2) If a person had interest holder liability with respect to a party to the merger or the acquired entity before the merger or share exchange becomes effective with respect to shares or eligible interests of such party or acquired entity that were exchanged in the merger or share exchange; were canceled in the merger; or the terms and conditions of which relating to interest holder liability were amended pursuant to the merger:

(i) The merger or share exchange does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the merger or share exchange becomes effective.

(ii) The provisions of the organic law governing any entity for which the person had that prior interest holder liability shall continue to apply to the collection or discharge of any interest holder liabilities preserved by subparagraph (i) of this paragraph, as if the merger or share exchange had not occurred.

(iii) The person shall have such rights of contribution from other persons as are provided by the organic law governing the entity for which the person had that prior interest holder liability with respect to any interest holder liabilities preserved by subparagraph (i) of this paragraph, as if the merger or share exchange had not occurred.

(iv) The person shall not, by reason of such prior interest holder liability, have interest holder liability with respect to any interest holder liabilities that arise after the merger or share exchange becomes effective.

(3) If a person has interest holder liability both before and after a merger becomes effective with unchanged terms and conditions with respect to the entity that is the survivor by reason of owning the same shares or eligible interests before and after the merger becomes effective, the merger has no effect on such interest holder liability.

(4) A share exchange has no effect on interest holder liability related to shares or eligible interests of the acquired entity that were not exchanged in the share exchange.

(b) Upon a merger becoming effective, a foreign corporation, or a foreign eligible entity, that is the survivor of the merger is deemed to agree that it will promptly pay the amount, if any, to which shareholders of each domestic corporation that is a party to the merger who exercise appraisal rights are entitled under part 13 of this chapter.

History:

[30-29-1107, added 2019, ch. 90, sec. 129, p. 305.]