Section 351.1132

Title XXIII CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS

Chapter 351

Effective - 28 Aug 2011   

  351.1132.  Transfer of membership and financial rights, restrictions — death of member, effect of. — 1.  A restriction on the transfer of membership interests of a cooperative may be imposed in the articles, bylaws, by a resolution adopted by the members, or by an agreement among or other written action by a number of members or holders of other membership interests or among them and the cooperative.  A restriction is not binding with respect to membership interests issued prior to the adoption of the restriction, unless the holders of those membership interests are parties to the agreement or voted in favor of the restriction.

  2.  The articles or bylaws may, but shall not be required to, provide that the cooperative or the patron members, individually or collectively, have the first right of purchasing the membership interests of any membership interests, or class thereof, offered for sale upon the terms and conditions as set forth in the articles or bylaws.  A repurchase of the membership interests by the cooperative shall render such membership interests null and void.

  3.  Except as provided in subsection 4 of this section or as otherwise provided in the articles or bylaws, a member's financial rights are transferable in whole or in part.  Such an assignment does not dissolve the cooperative and does not entitle or empower the assignee to become a member, to exercise any governance rights, to receive any notices from the cooperative, or to cause dissolution of the cooperative.

  4.  A restriction on the assignment of financial rights may be imposed in the articles or bylaws, by a resolution adopted by the board, by a resolution adopted by the members, by an agreement among or other written action by the members, or by an agreement among or other written action by the members and the cooperative.  A restriction is not binding with respect to financial rights reflected in the required records before the adoption of the restriction, unless the owners of those financial rights are parties to the agreement or voted in favor of the restriction.  Once a restriction is imposed under this subsection, such restriction cannot be amended or removed by the members unless by an affirmative two-thirds majority vote of the members at an annual or special members' meeting.

  5.  On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge a member's or an assignee's financial rights with payment of the unsatisfied amount of the judgment with interest.  To the extent so charged, the judgment creditor has only the rights of an assignee of a member's financial rights under this section.  Sections 351.1000 to 351.1228 shall not deprive any member or assignee of financial rights of the benefit of any exemption laws applicable to the membership interest.  This section shall be the sole and exclusive remedy of a judgment creditor with respect to the judgment debtor's membership interest.

  6.  Subject to section 351.1123 and except as otherwise set forth in the bylaws, if a member who is an individual dies or a court of competent jurisdiction adjudges the member to be incompetent to manage the member's person or property, or an order for relief under the bankruptcy code is entered with respect to the member, the member's executor, administrator, guardian, conservator, trustee, or other legal representative may exercise all of the member's rights for the purpose of settling the estate or administering the member's property.  Subject to section 351.1123, if a member is a business entity, trust, or other entity and is dissolved, terminated, or placed by a court in receivership or bankruptcy, the powers of that member may be exercised by its legal representative or successor.  The cooperative shall have the first right to repurchase the membership interest of such deceased, incompetent, or bankrupt member from such member's executor, administrator, guardian, conservator, trustee, or other legal representative, upon such terms and as set forth in the bylaws, and shall have the first right to repurchase the membership interest of such dissolved, terminated, or bankrupt business entity, trust, or other business entity.

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(L. 2011 S.B. 366)