180.1202 Annotation
In determining whether “substantially all" corporate assets are transferred within the meaning of s. 180.71 [now s. 180.1202] more than dollar values must be considered. The determinitive factor is whether the sale changes the nature of corporate activity. Sterman v. Hornbeck,
156 Wis. 2d 556,
457 N.W.2d 874 (Ct. App. 1990).
DISSENTERS' RIGHTS
180.1301(1)
(1) “Beneficial shareholder" means a person who is a beneficial owner of shares held by a nominee as the shareholder.
180.1301(2)
(2) “Corporation" means the issuer corporation or, if the corporate action giving rise to dissenters' rights under
s. 180.1302 is a merger or share exchange that has been effectuated, the surviving domestic corporation or foreign corporation of the merger or the acquiring domestic corporation or foreign corporation of the share exchange.
180.1301(3)
(3) “Dissenter" means a shareholder or beneficial shareholder who is entitled to dissent from corporate action under
s. 180.1302 and who exercises that right when and in the manner required by
ss. 180.1320 to
180.1328.
180.1301(4)
(4) “Fair value", with respect to a dissenter's shares other than in a business combination, means the value of the shares immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable. “Fair value", with respect to a dissenter's shares in a business combination, means market value, as defined in
s. 180.1130 (9) (a) 1. to
4.
180.1301(5)
(5) “Interest" means interest from the effectuation date of the corporate action until the date of payment, at the average rate currently paid by the corporation on its principal bank loans or, if none, at a rate that is fair and equitable under all of the circumstances.
180.1301(6)
(6) “Issuer corporation" means a domestic corporation that is the issuer of the shares held by a dissenter before the corporate action.
180.1301 History
History: 1989 a. 303;
1991 a. 16.
180.1301 Annotation
“Date of payment" in sub. (5) refers to the actual payment date by a corporation following a special proceeding, even if the payment occurs after a “verdict, decision or report," within the meaning of s. 814.04 (4), or after “judgment," within the meaning of s. 815.05 (8). Thus the definition of interest contained in sub. (5) applies to the time period following a court decision on fair value until final payment is made. HMO-W Incorporated v. SSM Health Care System,
2003 WI App 137,
266 Wis. 2d 69,
667 N.W.2d 733,
02-0042.
180.1301 Annotation
The phrase “rate that is fair and equitable under all of the circumstances" in sub. (5) directs the circuit court to consider the circumstances of the particular case in determining the interest rate to be paid. It was appropriate under this standard to look at the borrowing power of a parent corporation to determine if the rate the subsidiary would obtain would be the rate the parent could obtain. HMO-W Incorporated v. SSM Health Care System,
2003 WI App 137,
266 Wis. 2d 69,
667 N.W.2d 733,
02-0042.
180.1302(1)(1) Except as provided in
sub. (4) and
s. 180.1008 (3), a shareholder or beneficial shareholder may dissent from, and obtain payment of the fair value of his or her shares in the event of, any of the following corporate actions:
180.1302(1)(a)
(a) Consummation of a plan of merger to which the issuer corporation is a party if any of the following applies:
180.1302(1)(a)3.
3. The issuer corporation is a parent that is merged with its subsidiary under
s. 180.1104. This subdivision does not apply if all of the following are true:
180.1302(1)(a)3.a.
a. The articles of incorporation of the surviving corporation do not differ from the articles of incorporation of the parent before the merger, except for amendments specified in
s. 180.1002 (1) to
(9).
180.1302(1)(a)3.b.
b. Each shareholder of the parent whose shares were outstanding immediately before the effective time of the merger holds the same number of shares with identical designations, preferences, limitations, and relative rights, immediately after the merger.
180.1302(1)(a)3.c.
c. The number of voting shares, as defined in
s. 180.1103 (5) (a) 2., outstanding immediately after the merger, plus the number of voting shares issuable as a result of the merger, either by the conversion of securities issued pursuant to the merger or the exercise of rights or warrants issued pursuant to the merger, do not exceed by more than 20 percent the total number of voting shares of the parent outstanding immediately before the merger.
180.1302(1)(a)3.d.
d. The number of participating shares, as defined in
s. 180.1103 (5) (a) 1., outstanding immediately after the merger, plus the number of participating shares issuable as a result of the merger, either by the conversion of securities issued pursuant to the merger or the exercise of rights or warrants issued pursuant to the merger, do not exceed by more than 20 percent the total number of participating shares of the parent outstanding immediately before the merger.
180.1302(1)(b)
(b) Consummation of a plan of share exchange if the issuer corporation's shares will be acquired, and the shareholder or the shareholder holding shares on behalf of the beneficial shareholder is entitled to vote on the plan.
180.1302(1)(c)
(c) Consummation of a sale or exchange of all, or substantially all, of the property of the issuer corporation other than in the usual and regular course of business, including a sale in dissolution, but not including any of the following:
180.1302(1)(c)2.
2. A sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the shareholders within one year after the date of sale.
180.1302(1)(d)
(d) Except as provided in
sub. (2), any other corporate action taken pursuant to a shareholder vote to the extent that the articles of incorporation, bylaws or a resolution of the board of directors provides that the voting or nonvoting shareholder or beneficial shareholder may dissent and obtain payment for his or her shares.
180.1302(2)
(2) Except as provided in
sub. (4) and
s. 180.1008 (3), the articles of incorporation may allow a shareholder or beneficial shareholder to dissent from an amendment of the articles of incorporation and obtain payment of the fair value of his or her shares if the amendment materially and adversely affects rights in respect of a dissenter's shares because it does any of the following:
180.1302(2)(a)
(a) Alters or abolishes a preferential right of the shares.
180.1302(2)(b)
(b) Creates, alters or abolishes a right in respect of redemption, including a provision respecting a sinking fund for the redemption or repurchase, of the shares.
180.1302(2)(c)
(c) Alters or abolishes a preemptive right of the holder of shares to acquire shares or other securities.
180.1302(2)(d)
(d) Excludes or limits the right of the shares to vote on any matter or to cumulate votes, other than a limitation by dilution through issuance of shares or other securities with similar voting rights.
180.1302(2)(e)
(e) Reduces the number of shares owned by the shareholder or beneficial shareholder to a fraction of a share if the fractional share so created is to be acquired for cash under
s. 180.0604.
180.1302(4)
(4) Unless the articles of incorporation provide otherwise,
subs. (1) and
(2) do not apply to the holders of shares of any class or series if the shares of the class or series are registered on a national securities exchange or quoted on the National Association of Securities Dealers, Inc., automated quotations system on the record date fixed to determine the shareholders entitled to notice of a shareholders meeting at which shareholders are to vote on the proposed corporate action.
180.1302(5)
(5) Except as provided in
s. 180.1833, a shareholder or beneficial shareholder entitled to dissent and obtain payment for his or her shares under
ss. 180.1301 to
180.1331 may not challenge the corporate action creating his or her entitlement unless the action is unlawful or fraudulent with respect to the shareholder, beneficial shareholder or issuer corporation.
180.1302 Annotation
Minority discounts are inappropriate under dissenters' rights statutes and will not be applied in determining “fair value" under sub. (1). Each dissenting shareholder should be assigned the proportionate interest of his or her shares in the going interest in the entire company. HMO-W Incorporated v. SSM Health Care System,
2000 WI 46,
234 Wis. 2d 707,
611 N.W.2d 250,
98-2834.
180.1302 Annotation
The Role of Discounts in Determining “Fair Value" Under Wisconsin's Dissenters' Rights Statutes: The Case for Discounts. Emory. 1995 WLR 1155.
180.1303
180.1303
Dissent by shareholders and beneficial shareholders. 180.1303(1)(1) A shareholder may assert dissenters' rights as to fewer than all of the shares registered in his or her name only if the shareholder dissents with respect to all shares beneficially owned by any one person and notifies the corporation in writing of the name and address of each person on whose behalf he or she asserts dissenters' rights. The rights of a shareholder who under this subsection asserts dissenters' rights as to fewer than all of the shares registered in his or her name are determined as if the shares as to which he or she dissents and his or her other shares were registered in the names of different shareholders.
180.1303(2)
(2) A beneficial shareholder may assert dissenters' rights as to shares held on his or her behalf only if the beneficial shareholder does all of the following:
180.1303(2)(a)
(a) Submits to the corporation the shareholder's written consent to the dissent not later than the time that the beneficial shareholder asserts dissenters' rights.
180.1303(2)(b)
(b) Submits the consent under
par. (a) with respect to all shares of which he or she is the beneficial shareholder.
180.1303 History
History: 1989 a. 303.
180.1320
180.1320
Notice of dissenters' rights. 180.1320(1)
(1) If proposed corporate action creating dissenters' rights under
s. 180.1302 is submitted to a vote at a shareholders' meeting, the meeting notice shall state that shareholders and beneficial shareholders are or may be entitled to assert dissenters' rights under
ss. 180.1301 to
180.1331 and shall be accompanied by a copy of those sections.
180.1320(2)
(2) If corporate action creating dissenters' rights under
s. 180.1302 is authorized without a vote of shareholders, the corporation shall notify, in writing and in accordance with
s. 180.0141, all shareholders entitled to assert dissenters' rights that the action was authorized and send them the dissenters' notice described in
s. 180.1322.
180.1320 History
History: 1989 a. 303.
180.1320 Annotation
When the plaintiff was not a shareholder at the time of the complained of acts, it had no right to vote in dissent to a plan of liquidation and dissolution, and it could not be a dissenter entitled to notice of dissenters' rights, as only one who can vote in dissent is entitled to such notice under this section. Borne v. Gonstead Advanced Techniques, Inc.
2003 WI App 135,
266 Wis. 2d 253,
667 N.W.2d 709,
01-2624.
180.1321
180.1321
Notice of intent to demand payment. 180.1321(1)
(1) If proposed corporate action creating dissenters' rights under
s. 180.1302 is submitted to a vote at a shareholders' meeting, a shareholder or beneficial shareholder who wishes to assert dissenters' rights shall do all of the following:
180.1321(1)(a)
(a) Deliver to the issuer corporation before the vote is taken written notice that complies with
s. 180.0141 of the shareholder's or beneficial shareholder's intent to demand payment for his or her shares if the proposed action is effectuated.
180.1321(1)(b)
(b) Not vote his or her shares in favor of the proposed action.
180.1321(2)
(2) A shareholder or beneficial shareholder who fails to satisfy
sub. (1) is not entitled to payment for his or her shares under
ss. 180.1301 to
180.1331.
180.1321 History
History: 1989 a. 303.
180.1322(1)
(1) If proposed corporate action creating dissenters' rights under
s. 180.1302 is authorized at a shareholders' meeting, the corporation shall deliver a written dissenters' notice to all shareholders and beneficial shareholders who satisfied
s. 180.1321.
180.1322(2)
(2) The dissenters' notice shall be sent no later than 10 days after the corporate action is authorized at a shareholders' meeting or without a vote of shareholders, whichever is applicable. The dissenters' notice shall comply with
s. 180.0141 and shall include or have attached all of the following:
180.1322(2)(a)
(a) A statement indicating where the shareholder or beneficial shareholder must send the payment demand and where and when certificates for certificated shares must be deposited.
180.1322(2)(b)
(b) For holders of uncertificated shares, an explanation of the extent to which transfer of the shares will be restricted after the payment demand is received.
180.1322(2)(c)
(c) A form for demanding payment that includes the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action and that requires the shareholder or beneficial shareholder asserting dissenters' rights to certify whether he or she acquired beneficial ownership of the shares before that date.
180.1322(2)(d)
(d) A date by which the corporation must receive the payment demand, which may not be fewer than 30 days nor more than 60 days after the date on which the dissenters' notice is delivered.
180.1322 History
History: 1989 a. 303.
180.1323
180.1323
Duty to demand payment. 180.1323(1)
(1) A shareholder or beneficial shareholder who is sent a dissenters' notice described in
s. 180.1322, or a beneficial shareholder whose shares are held by a nominee who is sent a dissenters' notice described in
s. 180.1322, must demand payment in writing and certify whether he or she acquired beneficial ownership of the shares before the date specified in the dissenters' notice under
s. 180.1322 (2) (c). A shareholder or beneficial shareholder with certificated shares must also deposit his or her certificates in accordance with the terms of the notice.
180.1323(2)
(2) A shareholder or beneficial shareholder with certificated shares who demands payment and deposits his or her share certificates under
sub. (1) retains all other rights of a shareholder or beneficial shareholder until these rights are canceled or modified by the effectuation of the corporate action.
180.1323(3)
(3) A shareholder or beneficial shareholder with certificated or uncertificated shares who does not demand payment by the date set in the dissenters' notice, or a shareholder or beneficial shareholder with certificated shares who does not deposit his or her share certificates where required and by the date set in the dissenters' notice, is not entitled to payment for his or her shares under
ss. 180.1301 to
180.1331.
180.1323 History
History: 1989 a. 303.
180.1324
180.1324
Restrictions on uncertificated shares. 180.1324(1)(1) The issuer corporation may restrict the transfer of uncertificated shares from the date that the demand for payment for those shares is received until the corporate action is effectuated or the restrictions released under
s. 180.1326.
180.1324(2)
(2) The shareholder or beneficial shareholder who asserts dissenters' rights as to uncertificated shares retains all of the rights of a shareholder or beneficial shareholder, other than those restricted under
sub. (1), until these rights are canceled or modified by the effectuation of the corporate action.
180.1324 History
History: 1989 a. 303.
180.1325(1)(1) Except as provided in
s. 180.1327, as soon as the corporate action is effectuated or upon receipt of a payment demand, whichever is later, the corporation shall pay each shareholder or beneficial shareholder who has complied with
s. 180.1323 the amount that the corporation estimates to be the fair value of his or her shares, plus accrued interest.
180.1325(2)
(2) The payment shall be accompanied by all of the following:
180.1325(2)(a)
(a) The corporation's latest available financial statements, audited and including footnote disclosure if available, but including not less than a balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, an income statement for that year, a statement of changes in shareholders' equity for that year and the latest available interim financial statements, if any.
180.1325(2)(b)
(b) A statement of the corporation's estimate of the fair value of the shares.
180.1325(2)(d)
(d) A statement of the dissenter's right to demand payment under
s. 180.1328 if the dissenter is dissatisfied with the payment.
180.1325 History
History: 1989 a. 303.
180.1326
180.1326
Failure to take action. 180.1326(1)
(1) If an issuer corporation does not effectuate the corporate action within 60 days after the date set under
s. 180.1322 for demanding payment, the issuer corporation shall return the deposited certificates and release the transfer restrictions imposed on uncertificated shares.
