§414-415  Election to purchase in lieu ofdissolution.  (a)  In a proceeding under section 414-411(2) to dissolve acorporation that has no shares listed on a national securities exchange orregularly traded in a market maintained by one or more members of a national oraffiliated securities association, the corporation may elect or, if it fails toelect, one or more shareholders may elect to purchase all shares owned by thepetitioning shareholder at the fair value of the shares.  An election pursuantto this section shall be irrevocable unless the court determines that it isequitable to set aside or modify the election.

(b)  An election to purchase pursuant to thissection may be filed with the court at any time within ninety days after thefiling of the petition under section 414-411(2) or at such later time as thecourt in its discretion may allow.  If the election to purchase is filed by oneor more shareholders, the corporation, within ten days thereafter, shall givewritten notice to all shareholders, other than the petitioning shareholder. The notice shall state the name and number of shares owned by the petitioningshareholder and the name and number of shares owned by each electingshareholder and shall advise the recipients of their right to join in theelection to purchase shares in accordance with this section.  Shareholders whowish to participate shall file notice of their intention to join in thepurchase no later than thirty days after the effective date of the notice tothem.  All shareholders who have filed an election or notice of their intentionto participate in the election to purchase thereby become parties to theproceeding and shall participate in the purchase in proportion to theirownership of shares as of the date the first election was filed, unless theyotherwise agree or the court otherwise directs.  After an election has beenfiled by the corporation or one or more shareholders, the proceeding undersection 414-411(2) may not be discontinued or settled, nor may the petitioningshareholder sell or otherwise dispose of the shareholder's shares, unless thecourt determines that it would be equitable to the corporation and theshareholders, other than the petitioning shareholder, to permit thediscontinuance, settlement, sale, or other disposition.

(c)  If, within sixty days of the filing of thefirst election, the parties reach agreement as to the fair value and terms ofpurchase of the petitioning shareholder's shares, the court shall enter anorder directing the purchase of the petitioning shareholder's shares upon theterms and conditions agreed to by the parties.

(d)  If the parties are unable to reach anagreement as provided for in subsection (c), the court, upon application of anyparty, shall stay the section 414-411(2) proceedings and determine the fairvalue of the petitioning shareholder's shares as of the day before the date onwhich the petition under section 414-411(2) was filed or as of any other datethe court deems appropriate under the circumstances.

(e)  Upon determining the fair value of theshares, the court shall enter an order directing the purchase upon the termsand conditions that the court deems appropriate, which may include payment ofthe purchase price in installments, where necessary in the interests of equity,provision for security to assure payment of the purchase price and anyadditional costs, fees, and expenses as may have been awarded, and, if theshares are to be purchased by shareholders, the allocation of shares amongthem.  In allocating the petitioning shareholder's shares among holders ofdifferent classes of shares, the court shall attempt to preserve the existingdistribution of voting rights among holders of different classes insofar aspracticable and may direct that holders of a specific class or classes shallnot participate in the purchase.  Interest may be allowed at the rate and fromthe date determined by the court to be equitable, but if the court finds thatthe refusal of the petitioning shareholder to accept an offer of payment wasarbitrary or otherwise not in good faith, no interest shall be allowed.  If thecourt finds that the petitioning shareholder had probable grounds for reliefunder section 414-411(2)(B) or (D), it may award to the petitioning shareholderreasonable fees and expenses of counsel and of any experts employed by thepetitioning shareholder.

(f)  Upon entry of an order under subsection(c) or (e), the court shall dismiss the petition to dissolve the corporationunder section 414-411, and the petitioning shareholder shall no longer have anyrights or status as a shareholder of the corporation, except the right toreceive the amounts awarded to the petitioning shareholder by the order of thecourt that shall be enforceable in the same manner as any other judgment.

(g)  The purchase ordered pursuant tosubsection (e), shall be made within ten days after the date the order becomesfinal unless before that time the corporation files with the court a notice ofits intention to adopt articles of dissolution pursuant to sections 414-382 and414-383, which articles shall then be adopted and filed within fifty daysthereafter.  Upon filing of the articles of dissolution, the corporation shallbe dissolved in accordance with sections 414-385 to 414-387, and the order enteredpursuant to subsection (e) shall no longer be of any force or effect, exceptthat the court may award the petitioning shareholder reasonable fees andexpenses in accordance with the provisions of the last sentence of subsection(e) and the petitioning shareholder may continue to pursue any claimspreviously asserted on behalf of the corporation.

(h)  Any payment by the corporation pursuant toan order under subsection (c) or (e), other than an award of fees and expensespursuant to subsection (e), is subject to section 414-111. [L 2000, c 244, ptof §1; am L 2001, c 129, §43]