2023 District of Columbia Code › Title 31 - Insurance and Securities › Chapter 44 - Domestic Life Companies › § 31–4450. Merger or consolidation — Rights of dissenting shareholders

§ 31–4450. Merger or consolidation — Rights of dissenting shareholders.
(a)(1)(A) If, by the date of shareholder meeting described in § 31-4449, a shareholder of a domestic merging or consolidating company files with the company a written objection to the merger or the consolidation and does not vote for the action and if, within 20 days after the merger or consolidation, the shareholder makes a written demand to the surviving or the new company for payment of the fair market value of the dissenting shareholder’s shares, then the surviving or new company shall pay the shareholder the value of the shares.
(B) The fair market value of the shares shall equal the market value on the day before the shareholders vote.
(2) The company shall make the payment when the dissenter surrenders the dissenter’s certificate of share ownership.
(3) The demand shall state the number and the class of the shares owned by the dissenting shareholder.
(4) Any shareholders failing to make the demand described in subsection (1) of this section within the 20-day period shall have their interests in the company and their shares limited by the terms of the merger or consolidation.
(b)(1) If, within 30 days after the completion of the merger or consolidation, the dissenting shareholder and the surviving or new company agree upon the value of the shares, then the company shall pay the agreed upon value, according to subsection (a)(2) of this section, within 90 days after the merger or the consolidation becomes complete.
(2) When the company pays the agreed upon value, the dissenting shareholder shall cease having an interest either in the shares or in the company.
(c)(1) If, at the end of the 30-day period described in subsection (b)(1) of this section, the dissenting shareholder and the surviving or new company do not agree upon the value of the shares, then, within 60 days after the 30-day period ends, the dissenting shareholder may file a petition in the Superior Court of the District of Columbia asking for a determination of the fair value of the shares.
(2) The dissenter filing a timely petition shall be entitled to judgment against the surviving or new company for the amount the Court determines to be the fair value, and shall also be entitled to interest at the rate described in § 28-3302.
(3) The costs of the proceeding may be determined by the Court and may be apportioned by the Court against the parties.
(4) Some factors the Court may consider while making the apportionment described in paragraph (3) of this subsection shall be the following:
(A) Whether the fair value of the shares substantially exceeds the amount the company offered to pay.
(B) Whether the dissenting shareholder rejected the company’s offer and brought the action in good faith.
(C) Whether the company failed to make an offer.
(5) The judgment shall be payable after the dissenting shareholder complies with subsection (a)(2) of this section.
(6) Any dissenting shareholder failing to petition within the 60-day period described in paragraph (1) of this subsection shall have his or her interests in the company and in his or her shares, as well as the interests of people claiming under the dissenter, limited by the terms of the merger or the consolidation.
(d) The right of a dissenter to receive the fair value for shares shall cease when the company abandons the merger or consolidation.
(June 19, 1934, ch. 672, ch. III, § 49; as added Mar. 14, 1985, D.C. Law 5-160, § 3(c), 32 DCR 39.)
Prior Codifications
1981 Ed., § 35-647.
Section References
This section is referenced in § 31-4448.
Editor's Notes
In D.C. Law 5-160, paragraph (2) of subsection (c) of this section was mistakenly set forth twice. This duplication error has been eliminated from the section as set forth above.