Section 10A-2A-14.14 - Election to purchase in lieu of dissolution(a) In a proceeding under Section 10A-2A-14.10(a)(2) to dissolve a corporation, the corporation may elect or, if it fails to elect, one or more stockholders may elect to purchase all stock owned by the petitioning stockholder at the fair value of the stock. An election pursuant to this section shall be irrevocable unless the court determines that it is equitable to set aside or modify the election.(b) An election to purchase pursuant to this section may be filed with the court at any time within 90 days after the filing of the petition under Section 10A-2A-14.10(a)(2) or at a later time as the court in its discretion may allow. If the election to purchase is filed by one or more stockholders, the corporation shall, within 10 days thereafter, give written notice to all stockholders, other than the petitioner. The notice must state the name and number of shares of stock owned by the petitioner and the name and number of shares of stock owned by each electing stockholder and must advise the recipients of their right to join in the election to purchase stock in accordance with this section. Stockholders who wish to participate shall file notice of their intention to join in the purchase no later than 30 days after the effectiveness of the notice to them. All stockholders who have filed an election or notice of their intention to participate in the election to purchase thereby become parties to the proceeding and shall participate in the purchase in proportion to their ownership of stock as of the date the first election was filed, unless they otherwise agree or the court otherwise directs. After an election has been filed by the corporation or one or more stockholders, the proceeding under Section 10A-2A-14.10(a)(2) may not be discontinued or settled, nor may the petitioning stockholder sell or otherwise dispose of his or her stock, unless the court determines that it would be equitable to the corporation and the stockholders, other than the petitioner, to permit the discontinuance, settlement, sale, or other disposition.(c) If, within 60 days of the filing of the first election, the parties reach agreement as to the fair value and terms of purchase of the petitioner's stock, the court shall enter an order directing the purchase of the petitioner's stock upon the terms and conditions agreed to by the parties.(d) If the parties are unable to reach an agreement as provided for in subsection (c), the court, upon application of any party, shall stay the proceedings under Section 10A-2A-14.10(a)(2) and determine the fair value of the petitioner's stock as of the day before the date on which the petition under Section 10A-2A-14.10(a)(2) was filed or as of any other date as the court deems appropriate under the circumstances.(e) Upon determining the fair value of the stock, the court shall enter an order directing the purchase upon terms and conditions as the court deems appropriate, which may include payment of the purchase price in installments, where necessary in the interests of equity, provision for security to assure payment of the purchase price and any additional expenses as may have been awarded, and, if the stock is to be purchased by stockholders, the allocation of stock among them. In allocating the petitioner's stock among holders of different classes or series of stock, the court should attempt to preserve the existing distribution of voting rights among holders of different classes or series insofar as practicable and may direct that holders of a specific class or classes or series shall not participate in the purchase. Interest may be allowed at the rate and from the date determined by the court to be equitable, but if the court finds that the refusal of the petitioning stockholder to accept an offer of payment was arbitrary or otherwise not in good faith, no interest shall be allowed. If the court finds that the petitioning stockholder had probable grounds for relief under Section 10A-2A-14.10(a)(2)(ii) or (iv), it may award expenses to the petitioning stockholder.(f) Upon entry of an order under subsection (c) or (e), the court shall dismiss the petition to dissolve the corporation under Section 10A-2A-14.10(a)(2), and the petitioning stockholder shall no longer have any rights or status as a stockholder of the corporation, except the right to receive the amounts awarded by the order of the court which shall be enforceable in the same manner as any other judgment.(g) The purchase ordered pursuant to subsection (e) shall be made within 10 days after the date the order becomes final.(h) Any payment by the corporation pursuant to an order under subsections (c) or (e), other than an award of expenses pursuant to subsection (e), is subject to the provisions of Section 10A-2A-6.40.Ala. Code § 10A-2A-14.14 (1975)
Added by Act 2019-94,§ 1, eff. 1/1/2020.