NY Not for Profit Corp L § 1511 (2021)
2021 New York Laws NPC - Not-For-Profit Corporation Article 15 - Public Cemetery Corporations 1511 - Cemetery Indebtedness.

§ 1511. Cemetery indebtedness.  (a)   Certificates of indebtedness.  (1)  If a cemetery corporation be indebted for lands purchased for  cemetery  purposes,  or  for  services rendered  or  materials  furnished  in connection with the necessary and proper preservation  or  improvement  of  its  cemetery  or  for  moneys borrowed  exclusively  for  payment  of  such services or materials, the directors, by the concurring vote of a majority of their  whole  number, with the consent of the creditor to whom such indebtedness is owing, may issue certificates under the corporate seal, signed by the president and secretary,  for  such  amount,  payable  at the times and at the rate of interest agreed upon but  not  to  exceed  six  per  centum  per  annum; provided,  however, that there be first obtained from the cemetery board an order approving the issuance of such certificates.   In the  case  of certificates  of indebtedness issued for moneys borrowed exclusively for payment for services rendered or materials furnished in connection  with the necessary and proper preservation or improvement of its cemetery the consent  of the creditor to whom such indebtedness is owing shall not be required.  (2)  Such approval shall be given by the cemetery board  only if  it  determines  that  the  amount of the certificates proposed to be issued does not exceed the fair and reasonable  value  of  the  services rendered  or  materials furnished or the purchase price of real property as fixed in accordance  with  subdivision  (b)  of  this  section.    No certificate  issued shall be valid or enforceable unless there has first been issued by the  cemetery  board  an  order  of  approval  as  herein provided.    No  certificate shall be for less than one hundred dollars. The certificate  shall  be  transferable  by  delivery,  unless  therein otherwise  provided.  (3)   The directors shall keep an account of the number and amount of such certificates, the persons to whom issued,  the date  of  maturity,  the  rate of interest and the purpose for which the same were issued.    Each  cemetery  corporation  shall  file  with  the cemetery  board  a  verified statement setting forth all changes in such account during the previous calendar or fiscal year.  (4)  The directors shall set aside from the proceeds of sales  of  lots,  plots  and  parts thereof  such  sums  to  pay  such certificates at maturity as they deem necessary.  Until the certificates are paid the holders thereof shall be entitled at all meetings of the corporation, to one vote  for  each  one hundred  dollars  of  indebtedness  remaining  unpaid, except that those certificates of indebtedness issued for moneys borrowed exclusively  for payment  of  services  or  materials  shall  have no voting power.   The certificates shall not be a lien upon any  lot,  plot  or  part  thereof belonging to a lot owner.  (b)  Application of proceeds of sales of lots.  (1)  At least one-half of  the proceeds of sales of lots or the use thereof remaining after the deductions for the portion thereof  required  to  be  deposited  in  the permanent  maintenance  fund  and current maintenance fund together with the expenses of sale shall be applied by a cemetery corporation  to  the payment  of the purchase price of the real property acquired by it.  The remainder of such proceeds  shall  be  applied  by  the  corporation  to preserving,  improving  and  embellishing  the  cemetery grounds and the avenues and roads leading thereto, and to  defraying  its  expenses  and discharging  its liabilities.  After the payment of such purchase price, and the expense of surveying  and  laying  out  the  cemetery,  all  the proceeds of such sales shall be applied to the improvement, preservation and  embellishment of the cemetery and to such expenses and liabilities. (2)  Where a corporation has agreed with a person  from  whom  any  such lands  were  purchased  to  pay therefor a specified share not exceeding one-half of the proceeds of sales of lots therein or  the  use  thereof, such  corporation  may  continue to make payments as so agreed, provided  however that there be first deducted from said  proceeds  of  sales  the amount  required  to  be deposited in the permanent maintenance fund and current maintenance fund as aforesaid  together  with  the  expenses  of sale.   The balance of such proceeds shall continue to be applied by the corporation to the preservation, improvement and  embellishment  of  the cemetery,  and  the  expenses and liabilities of the corporation.  Where the corporation has heretofore agreed to pay a specified  share  of  the proceeds  as  aforesaid  in  payment  of the purchase price of land, the prices of lots or the use thereof in force when such purchase was  made, shall  not  be changed, while the purchase price remains unpaid, without the written consent of a majority in interest of the persons  from  whom the  lands  were  purchased  or  their  legal representatives.   (3)   A corporation which has hertofore issued certificates of land shares which entitle the owner to a specified share in the proceeds of  the  sale  of lots,  may  purchase such certificates with its surplus or reserve funds and hold such certificates for the benefit of  its  surplus  or  reserve funds, but such certificates may not thereafter be sold or reissued.  (c)      Certificates  of  stock  formerly  issued.    If  a  cemetery corporation,  incorporated  under  a  law  repealed  by  the  membership corporations   law,   prior   to   September   first,  eighteen  hundred ninety-five, converted its outstanding indebtedness or  certificates  of indebtedness  into  certificates  of  stock,  in  pursuance  of  law, no interest shall accrue to the holders  of  such  stock,  but  they  shall receive   annually   or  semi-annually  a  dividend  thereon  for  their proportional  part  of  the  entire  surplus  or  net  receipts  of  the corporation over and above current expenses; or if the proportion of the net  receipts or surplus which stockholders shall be entitled to receive shall have been fixed by agreement at the time of  issuing  such  stock, such  stockholders  shall be entitled to receive dividends in accordance with such agreement.  Such certificates of stock shall  be  transferable only   on  the  books  of  the  corporation  on  the  surrender  of  the certificate, unless otherwise provided on the face thereof, and on every such surrender a new certificate of stock shall be issued to the  person to  whom  the  same  has been transferred; and the holders of such stock shall be entitled, in person or by proxy, to one vote  for  every  share thereof,  at  each  meeting of the corporation.  A register of the stock issued by the corporation shall be kept by  its  directors  showing  the date  of issue, the number of shares, the par value thereof, the name of each person to whom issued, the number of the certificates therefor; and all transfers of such stock shall be noted and entered in such register, and the certificates surrendered shall be deemed canceled by  the  issue of   a  new  certificate,  and  the  surrendered  certificate  shall  be destroyed.  Any director may become the holder  or  transferee  of  such stock  for  his own individual use or benefit.  No such stock shall be a lien on the lot of any individual lot owner within the cemetery  limits; and  no other or greater liability of the corporation issuing such stock shall be created or deemed to exist than may be necessary to enforce the faithful application of the surplus or net receipts of  the  corporation to  and  among  the  holders  of  the  stock  in the manner hereinbefore specified.  A cemetery which has heretofore issued such certificates  of stock is a membership corporation and not a stock corporation.  (d)     Retirement  of  certificates  of  stock  of  certain  cemetery corporations.   If a cemetery  association,  incorporated  under  a  law repealed  by  chapter  five  hundred  fifty-nine of the laws of eighteen hundred  ninety-five  has  changed  certificates  of  indebtedness  into certificates of stock, pursuant to chapter one hundred seven of the laws of  eighteen  hundred  seventy-nine,  and such stock remains unimpaired, such association may retire such stock and issue  in  exchange  therefor  certificates  of  indebtedness representing the par value of such stock, such certificates of  indebtedness  to  bear  interest  at  a  rate  not exceeding  six  per centum per annum from the date of the last preceding dividend  payment;  provided,  however,  the  exchange of such stock for certificates of indebtedness  shall  be  authorized  at  a  duly  called meeting  of  such  association  by  the  affirmative  vote  of  at least two-thirds  of  the  stock  issued  and  outstanding  and  of  at  least two-thirds  of all votes cast at such meeting in favor of such exchange. Any holder of such stock not voting in favor of  the  exchange  of  such stock for certificates of indebtedness may at any time prior to the vote upon  such  exchange,  or  if  notice  of  the meeting to vote upon such exchange was not mailed to him at least twenty days prior to the  taking of  such vote, then within twenty days after the mailing of such notice, object to such exchange and demand payment for his stock  and  thereupon such stockholder or the corporation shall have the right, subject to the same   conditions  and  provisions  contained  in  section  six  hundred twenty-three of  the  business  corporation  law,  to  have  such  stock appraised  and paid for as provided in such section.  Such objection and demand must  be  in  writing  and  filed  with  the  corporation.    The provisions  of this section relating to certificates of indebtedness and the rights of  the  holders  thereof  shall  apply  to  certificates  of indebtedness  issued  as  provided  in this subdivision.   The stocks so retired shall not be reissued by such association and it shall  have  no right thereafter to issue any certificates of stock.  (e)    Purchase,  retirement  and exchange of stock.   (1)  A cemetery corporation which has issued certificates of stock, pursuant to  chapter one  hundred  seven  of  the  laws  of eighteen hundred seventy-nine, or chapter  two  hundred  sixty-seven  of  the  laws  of  eighteen  hundred ninety-four, may purchase such certificates of stock with its surplus or reserve funds, and hold such certificates for the benefit of its surplus or  reserve  funds,  but such certificates of stock so purchased may not thereafter be sold or reissued.  (2)  A cemetery corporation  which  has issued  certificates  of  stock  may  also effect the retirement of such stock as follows:   The board of directors  of  such  corporation  shall adopt  by  vote  of  a majority of the entire number of such directors a plan for such retirement which shall include the fixing of a price which the corporation will pay for all shares of stock then outstanding, which price shall, in the opinion of such directors, represent the fair  value of  such  stock.    The  said  plan  shall be submitted to a duly called meeting of the members of such  corporation  and,  if  approved  by  the affirmative  vote  of  at  least  two-thirds  of  all votes cast at such meeting, including the affirmative vote of the holders of record  of  at least  two-thirds  of  all  shares  of stock issued and then outstanding exclusive of any shares of stock held by the corporation,  shall  become binding  upon  all  stockholders, and they shall proceed to transfer and surrender to the corporation their certificates of stock and to  receive payment  therefor in accordance with the terms of such plan.  Any holder of shares of such stock not voting in favor of such plan may at any time prior to the vote approving such plan, or if notice of  the  meeting  to vote  upon such plan was not mailed to him at least twenty days prior to the taking of such vote, then within twenty days after  the  mailing  of such  notice,  but in any event within ten days after the taking of such vote, by written notice filed with such corporation, object to such plan and demand appraisal of his shares.  Thereupon, such stockholder or  the corporation  shall  have  the  right, subject to the same conditions and provisions contained in section six hundred twenty-three of the business corporation law, to have such stock appraised and paid for  as  provided in  such  section.  (3)    A  cemetery  corporation  which  has issued  certificates of stock may also effect the  exchange  of  such  stock  as follows:    The  board of directors of such corporation shall adopt by a vote of a majority of the entire number of such directors a plan for the exchange  of  all  shares of stock then outstanding for a like number of participating  certificates.    Such  participating  certificates  shall entitle  the  owners  to  a specified share not exceeding, collectively, one-half of the proceeds of sales of lots therein  or  the  use  thereof after  first deducting from such proceeds of sale the amount required to be deposited in the permanent maintenance fund and  current  maintenance fund  as  provided in and pursuant to subdivision (a) of section fifteen hundred seven of this article, together with the expenses of sale.  Such plan shall then be submitted to the cemetery board for its approval.  In making its determination the  cemetery  board  shall  consider  and  may condition  its approval on the purposes of this section.  Thereafter, if the cemetery board approves such plan, or  in  the  event  the  cemetery board  conditioned  its  approval  and  the conditions imposed have been accepted by a vote of a majority of the entire board of directors of the corporation, such plan shall be submitted to a duly  called  meeting  of the  members  of  such  corporation, and, if approved by the affirmative vote of at least two-thirds of all votes cast at such meeting, including the affirmative vote of the holders of record of  at  least  ninety  per centum  of  all shares of stock issued and then outstanding exclusive of any shares of stock held by the corporation, shall become  binding  upon all  stockholders.   The stockholders shall then proceed to transfer and surrender to the corporation their shares of stock  and  to  receive  in exchange  therefor  participating  certificates  in  accordance with the terms of such plan.  Any holder of shares of such stock  not  voting  in favor  of  such  plan  may  at any time prior to the vote approving such plan, or if notice of the meeting to vote upon such plan was not  mailed to  him  at  least  twenty  days  prior to the taking of such vote, then within twenty days after the mailing of such notice, but  in  any  event within  ten  days after the taking of such vote, by written notice filed with such corporation, object to such plan and demand appraisal  of  his shares.    Thereupon, such stockholder or the corporation shall have the right, subject to  the  same  conditions  and  provisions  contained  in section  six  hundred  twenty-three  of the business corporation law, to have such stock appraised and paid for  as  provided  in  such  section. Each  such  participating  certificate issued in exchange for a share of stock shall entitle the holder thereof to one vote for each  certificate at  all  meetings  of  the  corporation.   The prices of lots or the use thereof at the time when such exchange is made  shall  not  be  changed, while  such  participating  certificates remain outstanding, without the written consent of a majority in interest of the holders thereof  except as now or hereafter authorized by law.  The shares of stock so exchanged shall  not  be  reissued  by such corporation and it shall have no right thereafter to issue any shares of stock.  (f)  Exchange of certificates for shares.  The directors of a cemetery corporation, which has issued certificates for shares, from time to time by resolution, may fix the value of each of such  shares  and  authorize the  acceptance  by the corporation of such certificates at the value so fixed in payment for land.    All  certificates  so  accepted  shall  be immediately cancelled and shall not be again issued.