35-9-503. Extraordinary relief -- share purchase. (1) If the court finds that the ordinary relief described in 35-9-502(1) is or would be inadequate or inappropriate, it may order the corporation dissolved under 35-9-504 unless the corporation or one or more of its shareholders purchases all the shares of the shareholder for their fair value and on terms determined under subsection (2).
(2) If the court orders a share purchase, it shall:
(a) determine the fair value of the shares, considering among other relevant evidence:
(i) the going concern value of the corporation;
(ii) any agreement among some or all of the shareholders fixing the price or specifying a formula for determining share value for any purpose;
(iii) the recommendations of appraisers, if any, appointed by the court; and
(iv) any legal constraints on the corporation's ability to purchase the shares;
(b) specify the terms of the purchase, including if appropriate:
(i) terms for installment payments;
(ii) subordination of the purchase obligation to the rights of the corporation's other creditors;
(iii) security for a deferred purchase price; and
(iv) a covenant not to compete or other restriction on the seller;
(c) require the seller to deliver all the seller's shares to the purchaser upon receipt of the purchase price or the first installment of the purchase price;
(d) provide that after the seller delivers the shares, the seller has no further claim against the corporation or its directors, officers, or shareholders other than a claim to any unpaid balance of the purchase price and a claim under any agreement with the corporation or the remaining shareholders that is not terminated by the court; and
(e) provide that if the purchase is not completed in accordance with the specified terms, the corporation is to be dissolved under 35-9-504.
(3) After the purchase order is entered, any party may petition the court to modify the terms of the purchase and the court may do so if it finds that changes in the financial or legal ability of the corporation or other purchaser to complete the purchase justify a modification.
(4) If the corporation is dissolved because the share purchase was not completed in accordance with the court's order, the selling shareholder has the same rights and priorities in the corporation's assets as if the sale had not been ordered.
History: En. Sec. 24, Ch. 432, L. 1987; amd. Sec. 1301, Ch. 56, L. 2009.