A shareholder who is entitled to vote, but does not lend his approval to a sale or disposition of the corporate assets, has the right to payment of the fair value of his shares. There is an exception to this rule, however. It does not apply to transactions which are exclusively for cash in which shareholder approval is contingent on the dissolution and distribution of assets within a year\u2019s time.<\/p>\n

What is the rule concerning mortgages, pledges and security interests?<\/u><\/h4>\n

There is no need to obtain shareholder approval for the transpiring of mortgages, pledges or other security interests. Board action alone suffices for authorization, absent a clause in the certificate of incorporation stating otherwise.<\/p>\n

Does corporate acquisition of assets impose tort liability?<\/u><\/h4>\n

As a rule, a corporation which acquires the assets of another does not bear tort liability which was incumbent on its predecessor.<\/p>\n

There are exceptions to the above rule, however. The corporation can be held liable if: a) it assumed its predecessor\u2019s tort liability either expressly or through implication; b) the seller and purchaser were consolidated or merged; c) the purchasing corporation was nothing more than a continuation of the one doing the selling; d) the transaction is done fraudulently in an attempt at circumventing such obligations.<\/p>\n

While the preceding and succeeding corporations are free to allocate which will bear responsibility in the event of a customer filing suit, this will not affect the customer\u2019s discretion to decide which he chooses to sue.<\/p>\n

[author_and_contact_info]<\/p>\n","protected":false},"excerpt":{"rendered":"

What approval is needed? Shareholder approval is required when a company wishes to sell, lease, exchange or otherwise dispose of all or substantially all of the corporation\u2019s assets in New York, other than in the usual course of business which is actually conducted by the corporation. What is the procedure? Board approval – The board…<\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[161],"tags":[],"class_list":["post-82352","post","type-post","status-publish","format-standard","hentry","category-corporate-and-commercial-law-en"],"acf":[],"yoast_head":"\n