10-11202. Sale of assets other than in
regular course of activities
A. On the terms and conditions and for the consideration determined by the
corporation's board of directors, a corporation may sell, lease, exchange or otherwise
dispose of all or substantially all of its property, with or without the goodwill, other
than in the usual and regular course of its activities.
B. For a proposed transaction to be approved all of the following shall have
occurred:
1. The board of directors shall approve the transaction. If the members of the
corporation are entitled to vote on the proposed transaction, the board of directors
shall submit the proposed transaction for approval by its members and shall recommend the
proposed transaction to the members, unless the board of directors determines that
because of a conflict of interest or other special circumstances it should not make a
recommendation and communicates the basis for its determination to the members with the
plan.
2. If the members of the corporation are entitled to vote on the proposed
transaction, the members entitled to vote on the proposed transaction shall approve the
proposed transaction.
3. Each person whose approval is required by the articles of incorporation for the
sale, lease, exchange or other disposal shall approve the proposed transaction in
writing.
C. The board of directors may condition its submission of the proposed transaction
on any basis.
D. If the corporation submits the transaction for member action at a membership
meeting, the corporation shall notify each member to which the proposed transaction is to
be submitted for approval of the proposed membership meeting in accordance with section
10-3705. The notice shall state that the purpose or one of the purposes of the meeting
is to consider the proposed transaction and shall contain or be accompanied by a copy or
summary of a description of the transaction.
E. Unless chapters 24 through 40 of this title, the articles of incorporation or
the board of directors acting pursuant to subsection C of this section, requires a
greater vote or voting by class, a majority of the votes cast or a majority of the voting
power of the class, whichever is less, shall approve the proposed transaction to be
authorized.
F. At any time before consummation of the sale, lease, exchange or other
disposition of property, the transaction may be abandoned, subject to any contractual
rights, without further action by the members or any other person who approved the
transaction, in accordance with the procedure set forth in the resolution proposing the
transaction or, if none is set forth, in the manner determined by the board of directors.
G. A transaction that constitutes a distribution is governed by sections 10-11301
and 10-11302 and not by this section.
H. Except as provided in subsection K of this section and chapter 35.1 of this
title, any person who intends to purchase, lease or otherwise acquire all or
substantially all of the assets of a tax exempt corporation described in section 43-1201,
paragraph 4, or all or substantially all of the assets located in this state of a tax
exempt foreign corporation described in section 501(c)(3) of the internal revenue code of
1986 and is conducting affairs in this state, shall comply with subsection B of this
section before such purchase, lease or acquisition if either:
1. The person is a tax exempt organization described in section 43-1201, paragraph
4 or section 501(c)(3) of the internal revenue code of 1986 but intends to use in an
unrelated trade or business, determined by applying section 43-1201, paragraph 4 or
section 513(a) of the internal revenue code of 1986 to such organization, any substantial
portion of the assets to be acquired which were not being used in an unrelated trade or
business of the corporation or foreign corporation conveying the assets immediately
before the proposed purchase, lease or acquisition.
2. The person is not a tax exempt organization described in section 43-1201,
paragraph 4 or section 501(c)(3) of the internal revenue code of 1986.
I. A person subject to the requirements of subsection H of this section shall give
public notice of the intended transaction in accordance with subsection J of this section
and shall hold a public hearing on the intended transaction no less than ten days after
the first publication of the notice and no less than ten days before the intended
purchase, lease or acquisition occurs. The sole purpose of the public hearing is to
receive public comment regarding the proposed transaction. The public hearing shall be
held before at least two representatives of the person intending to purchase, lease or
otherwise acquire the assets of the corporation or foreign corporation and at least two
representatives of the corporation or foreign corporation.
J. Notice of the intended transaction shall include the time, date and place of the
public hearing, the names of the parties to the transaction, a general summary of the
intended transaction, a general description of the assets to be purchased, leased or
otherwise acquired and a general description of the intended use of the assets after the
completion of the transaction. The notice shall be published three consecutive times in
a newspaper of general circulation in the county of the known place of business of the
corporation or foreign corporation from which the assets are intended to be purchased,
leased or otherwise acquired. The first notice shall be published no less than twenty
days before the intended purchase, lease or acquisition occurs.
K. The requirements of subsections I and J of this section do not apply to the
purchase, lease or other acquisition of assets under this section from a domestic or
foreign corporation as provided in this section if any of the following applies:
1. The transaction involves assets having a book value at the time of the
transaction, net of accumulated depreciation, of less than two million dollars.
2. The transaction is in the usual course of business of the transferor or in
connection with the mortgage or pledge of any or all property and assets of the
corporation or foreign corporation whether or not in its usual and regular course of
business.
3. The transferor has assets immediately prior to such transaction, with a book
value of more than ten million dollars, net of accumulated depreciation.
4. The transaction is to enable the transferor to finance the purchase of assets or
to refinance assets already owned by it, or if, after the transaction has been completed,
the transferor continues to have possession of the assets purchased, leased or otherwise
acquired or used in the usual and regular course of its business.
5. The transferor offers goods or services only to members who are entitled to vote
for its board of directors.
6. The transferor is organized for religious purposes and does not have, as a
substantial portion of its business, the offering of goods or services on a regular basis
to the public for remuneration.
7. The purchase, lease or sale of assets as described in subsection A of this
section by the United States, this state, a political subdivision of this state or an
agency or instrumentality of such a governmental entity.
8. The purchase, lease or sale of assets as described in subsection A of this
section by a hospital, medical, dental or optometric service corporation licensed
pursuant to title 20, chapter 4, article 3.
L. For the purposes of subsection K, paragraph 6 of this section:
1. Goods and services shall include, but are not limited to, medical, hospital,
dental or counseling or social services offered on a regular basis to the public for
remuneration.
2. A transferor organized for religious purposes includes a corporation or foreign
corporation that controls or is controlled directly or indirectly by a corporation or
foreign corporation organized for religious purposes.
M. The exemption provided by subsection K, paragraph 7 of this section does not
apply to a corporation or foreign corporation that provides services to or operates
assets of such a governmental entity pursuant to a lease or contract.
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