Bus. Corp. Act case decided by the Bus. Orgs. Code?!?

Sembera v. PetroFac (Published): Tyler’s PetroFac, in its S-Corp form, vanished when its shares were exchanged for shares in a new “Limited” PetroFac corporation. An S-Corp shareholder dissented to this exchange. Under the Business Corporations Act, a dissenter has the right “restoration” of his shares — so long as it is “without prejudice to any corporate proceedings which may have been taken during the interim.” The Tyler court uses the soon-to-go-into-effect Business Organizations Code to determine that the share exchange is a prejudiced proceeding under the Act. Bottom line: A dissenting shareholder can’t get “restoration” of shares in a corporation that no longer exists.

But it’s a long road to get to that conclusion …Continue Reading…

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