Rights of Dissenting Shareholders; Surrender of Certificates

1. Law
2. Georgia Code
3. Banking and Finance
4. Financial Institutions
5. Banks and Trust Companies
6. Merger and Consolidation of State Banks and Trust Companies
7. Rights of Dissenting Shareholders; Surrender of Certificates

1. A shareholder of a bank or trust company which is a party to a plan of proposed merger, share exchange, or consolidation under this part who objects to the plan shall be entitled to the rights and remedies of a dissenting shareholder as determined under Chapter 2 of Title 14, known as the "Georgia Business Corporation Code."
2. The bank or trust company into which the other or others have been merged or consolidated, or the acquiring corporation in a share exchange, as the case may be, shall have the right to require the return of the original certificates of stock held by each shareholder in each or either of the institutions and in lieu thereof:
   1. To issue to each shareholder new certificates for such number of shares of the institution into which the others shall have been merged or consolidated or of the acquiring corporation in a share exchange; or
   2. To cause to be paid or delivered to each shareholder the amount of cash or securities of any other corporation or combination of cash and such securities as, under the plan of merger, share exchange, or consolidation, the said shareholder may be entitled to receive.

(Ga. L. 1919, p. 135, art. 13, §§ 4, 6; Code 1933, § 13-1405; Ga. L. 1973, p. 278, § 2; Code 1933, § 41A-2408, enacted by Ga. L. 1974, p. 705, § 1; Ga. L. 1989, p. 946, § 68; Ga. L. 1989, p. 1257, § 15; Ga. L. 2007, p. 502, § 11/SB 70.)

Editor's notes.

- The amendment to this Code section by Ga. L. 1989, p. 946, § 68, was superseded by the amendment by Ga. L. 1989, p. 1257, § 15, which was enacted later.

Law reviews.

- For survey article on business associations, see 34 Mercer L. Rev. 13 (1982).

JUDICIAL DECISIONS

Former Code Section14-2-251 (see now O.C.G.A. § 14-2-1320 et seq.) and O.C.G.A. § 7-1-537 make no provision for conditional dissent by a shareholder to a plan or proposed merger. Baugh v. Citizens & S. Nat'l Bank, 248 Ga. 180, 281 S.E.2d 531 (1981).

Corporation's power to impair shareholders' rights differs from state's power over corporations created by it.

- There is a substantial difference between corporation's attempting to reserve right to impair vested rights of the corporation's shareholders through altering or amending the corporation's internal structure and retention by state of power to modify or withdraw charters granted to corporations created by the state. Baugh v. Citizens & S. Nat'l Bank, 248 Ga. 180, 281 S.E.2d 531 (1981).

RESEARCH REFERENCES

Am. Jur. 2d.

- 10 Am. Jur. 2d, Banks and Financial Institutions, §§ 194, 198, 238.

C.J.S.

- 9 C.J.S., Banks and Banking, §§ 158 et seq., 657.

ALR.

- Constitutionality of recent legislation relating to merger, consolidation, or reorganization of banks as affected by rights of dissenting creditors or stockholders, 92 A.L.R. 1337; 96 A.L.R. 1445; 104 A.L.R. 1203.

PART 15 CONVERSIONS, MERGERS, AND CONSOLIDATIONS INVOLVING NATIONAL BANKS

Cross references.

- Requirement that department approve change in control of financial institutions generally, § 7-1-231.

RESEARCH REFERENCES

ALR.

- Novation where bank transfers its assets to another bank which assumes its obligation, 79 A.L.R. 82.

Constitutionality of recent legislation relating to merger, consolidation, or reorganization of banks as affected by rights of dissenting creditors or stockholders, 96 A.L.R. 1445; 104 A.L.R. 1203.

Constitutionality, construction, and application of federal statute relating to power of national bank to engage in trust business, 153 A.L.R. 410.

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