§1-1436. Judicial determination of fair value and payment terms for withdrawing shareholder's shares

A.(1) If a shareholder's right to withdraw from a corporation is recognized by means of a notice of acceptance under R.S. 12:1-1435(E), but the notice does not create a contract under R.S. 12:1-1435(F), the corporation and shareholder shall have sixty days from the effective date of the notice of acceptance to negotiate the fair value of the shareholder's shares and the terms under which the corporation is to purchase the shares. Within one year after the expiration of the sixty-day period, either party may file an action against the other to determine the fair value of the shares and the terms for the purchase of the shares. Venue for the action lies in the district court of the parish where the corporation's principal office or, if none in this state, where its registered office is located.

(2) If neither party files an action to establish the fair value of the shares within the time period provided in this Subsection, then subject to the terms of any settlement reached between the parties, the effects of the earlier notices of withdrawal and acceptance under R.S. 12:1-1435 are terminated. The termination of the effects of the earlier notices does not affect the right of the shareholder to reassert the shareholder's right to withdraw through the filing of a new notice of withdrawal in accordance with R.S. 12:1-1435(D).

B. If a shareholder's right to withdraw from a corporation is recognized by a judgment in an action under R.S. 12:1-1435(G), the court shall stay the proceeding for a period of at least sixty days from the date that the judgment is rendered to allow the corporation and shareholder to negotiate the fair value and purchase terms for the withdrawing shareholder's shares, or other terms for the settlement of their dispute. After the stay expires or is lifted, either party may file a motion to have the court determine the fair value and terms for the purchase of the shares.

C. The court shall conduct the trial of the action under Subsection A of this Section or the motion under Subsection B of this Section by summary proceeding.

D. Except as provided in Subsection E of this Section, at the conclusion of the trial the court shall render final judgment as described in Paragraphs (1) and (2) of this Subsection:

(1) In favor of the shareholder and against the corporation for the fair value of the shareholder's shares.

(2) In favor of the corporation and against the shareholder that does both of the following:

(a) Terminates the shareholder's ownership of shares in the corporation.

(b) Orders the shareholder to deliver to the corporation within thirty days of the date of the judgment any certificate issued by the corporation for the shares or an affidavit by the shareholder that the certificate has been lost, stolen, destroyed, or previously delivered to the corporation.

E. If at the conclusion of the trial the court finds that the corporation has proved that its payment of the judgment rendered in accordance with Subsection D of this Section would violate a limitation or requirement as described in R.S. 12:1-1435(I) or cause undue harm to the corporation or its creditors, the court shall render a final judgment that, by itself or in conjunction with earlier orders or partial judgments of the court, provides relief as close in value and effect as feasible to that contemplated by Subsection D of this Section, but adjusted as necessary to avoid the relevant violation or undue harm.

F. If a withdrawing shareholder fails to deliver the certificate for a share covered by a judgment rendered as provided in Subsection D or E of this Section, and a third person presents the certificate to the corporation after the shareholder's ownership of the share is terminated by the judgment, the shareholder shall indemnify the corporation for any dilution in value imposed on other shareholders as a result of the corporation's obligation to recognize the person presenting the certificate as the owner of the shares represented by the certificate.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2016, No. 442, §1; Acts 2017, No. 57, §1.