(1) A member has the power to dissociate at any time, rightfully or wrongfully, by notice in a record.
(2) Unless the articles or bylaws otherwise provide, a member's dissociation from a limited cooperative association is wrongful only if the dissociation:
Breaches an express provision of the articles or bylaws; or
Occurs before the termination of the limited cooperative association and:
The person is expelled as a member under paragraph (c) or (d) of subsection (4) ofthis section; or
In the case of a person that is not an individual, trust other than a business trust, orestate, the person is expelled or otherwise dissociated as a member because it dissolved or terminated in bad faith.
Unless the articles or bylaws otherwise provide, a person that wrongfully dissociatesas a member is liable to the limited cooperative association for damages caused by the dissociation. The liability is in addition to any other debt, obligation, or liability of the person to the association.
A member is dissociated from the limited cooperative association as a member when:
The association receives notice from the member in a record of dissociation as amember or, if the member specifies in the notice an effective date later than the date the association received notice, on that later date;
An event stated in the articles or bylaws as causing the member's dissociation as amember occurs;
The member is expelled as a member under the articles or bylaws;(d) The member is expelled as a member by the board of directors because:
It is unlawful to carry on the association's activities with the member as a member;
There has been a transfer of all the member's financial rights in the association, otherthan:
A creation or perfection of a security interest; or
A charging order in effect under section 7-58-605 that has not been foreclosed;
The member is a limited liability company or partnership that has been dissolvedand its business is being wound up;
The member is a corporation or cooperative and:
The member filed a statement of dissolution or the equivalent, or the jurisdiction offormation revoked the member's charter or right to conduct business;
The association sends a notice to the member that it will be expelled as a member fora reason described in sub-subparagraph (A) of this subparagraph (IV); and
Not later than ninety days after the notice was sent under sub-subparagraph (B) ofthis subparagraph (IV), the member did not reinstate or the jurisdiction of formation did not reinstate the member's charter or right to conduct business; or
(V) The member is an individual and is adjudged incompetent;
In the case of a member who is an individual, the individual dies;
In the case of a member that is a trust or is acting as a member by virtue of being atrustee of a trust, all the trust's financial rights in the association are distributed;
In the case of a member that is an estate, the estate's entire financial interest in theassociation is distributed;
In the case of a member that is not an individual, partnership, limited liability company, cooperative, corporation, trust, or estate, the member is terminated; or
The association's participation in a merger if, under the plan of merger as approvedunder part 16 of this article, the member ceases to be a member.
Source: L. 2011: Entire article added, (SB 11-191), ch. 197, p. 802, § 1, effective April 2, 2012.