Opinion ID: 2215298
Heading Depth: 1
Heading Rank: 5

Heading: is the exclusive remedy available to golden contained in sdcl 47-6?

Text: Procedures to be followed in the sale of corporate assets and an avenue for dissenting shareholders are established by SDCL 47-6. After a corporation's board of directors has passed a resolution recommending the sale of all or substantially all of the corporate assets, the proposal for sale must be submitted to a vote of the shareholders. SDCL 47-6-19. The stockholders are to be notified of the meeting and its purpose a minimum of twenty days prior to the date for which it is scheduled. SDCL 47-6-20. A shareholder who wishes to dissent to the proposed sale must submit a written objection prior to or at the meeting. If the resolution is adopted by a two-thirds vote of the shareholders, a dissenting shareholder may, within ten days of the date upon which the vote was taken, make demand upon the corporation for payment of a fair value for his or her shares. A shareholder who fails to make such demand within ten days is bound by the terms of the proposal. SDCL 47-6-24. The corporation must pay a dissenting shareholder the fair value of his shares as of the day prior to the date upon which the vote was taken, excluding any appreciation or depreciation attributable to anticipation of the sale. SDCL 47-6-25. Within ten days of the date upon which a sale is effected, the corporation must notify each dissenting shareholder and make an offer to pay for his or her shares at a specified price. The notice and offer are to be accompanied by the latest available corporate balance sheet and a profit and loss statement for the twelve-month period ending on the date of the balance sheet. SDCL 47-6-28. If a price is agreed upon within thirty days after the date upon which the sale is effected, payment must be made for the dissenting shareholder's stock within ninety days of the date of the sale. SDCL 47-6-29. If the dissenting stockholder and the corporation cannot agree on an acceptable price, either may petition a court of competent jurisdiction for determination of a fair value. SDCL 47-6-30. Within twenty days of demanding payment for his or her shares, a dissenting stockholder must submit his or her stock certificate to the corporation for a notation of the demand. Upon failure to submit the certificates for such a notation, the corporation may terminate the rights of the dissenting stockholder to surrender his certificates and collect a fair and reasonable value therefor. SDCL 47-6-38. Respondents urge that this remedy is the only one available to Golden. To sustain that contention would be the equivalent of holding that Golden had no remedy at all, for there was no possibility that he could comply with the requirements of the chapter. Procedural requirements which are set forth in statutes creating a right to appraisal and payment for shares owned by a dissenting shareholder must be complied with. Rath v. Rath Packing Company, 1965, 257 Iowa 1277, 136 N.W.2d 410, 415; Poss v. Rossen-Poss Agency, Inc., 1966, 3 Mich.App. 726, 143 N.W.2d 616. Golden could not fulfill the requirement that a written objection be submitted prior to or at the meeting because he did not receive notice of the meeting. He could not have demanded payment for his shares within ten days of the shareholders' approval since he did not acquire knowledge of it until many months later. He could not submit his stock certificate to the corporation within twenty days of making demand for payment so that notation of demand could be made thereon because the certificate was retained as part of the stockbook instead of being delivered to him. The record contains no indication that the respondents met their responsibilities with regard to obtaining shareholder approval and they will not be allowed to hold the shareholders to requirements they disregarded. A conclusion to the contrary would be particularly inequitable in light of the fact that the respondents' actions prevented the appellant from complying with the statutory procedure.