(a)Subject to any contrary provision in the articles, which may include a reference to a separate written agreement between two or more shareholders pertaining to the purchase of shares:
In any suit for involuntary dissolution, or in any proceeding for voluntary dissolution initiated by the vote of shareholders representing only 50 percent of the voting power, the corporation or, if it does not elect to purchase, the holders of 50 percent or more of the voting power of the corporation (the “purchasing parties”) may avoid the dissolution of the corporation and the appointment
of any receiver by purchasing for cash the shares owned by the plaintiffs or by the shareholders so initiating the proceeding (the “moving parties”) at their fair value.
The fair value shall be determined on the basis of the liquidation value as of the valuation date but taking into account the possibility, if any, of sale of the entire business as a going concern in a liquidation. In fixing the value, the amount of any damages resulting if the initiation of the dissolution is a breach by any moving party or parties of an agreement with the purchasing party or parties may be deducted from the amount payable to the moving party or parties, unless the ground for dissolution is that specified in paragraph (4) of subdivision (b) of Section 1800. The election of the corporation to purchase may be made by the approval of the outstanding shares (Section 152) excluding
shares held by the moving parties.
(b)If the purchasing parties (1) elect to purchase the shares owned by the moving parties, and (2) are unable to agree with the moving parties upon the fair value of those shares, and (3) give bond with sufficient security to pay the estimated reasonable expenses (including attorneys’ fees) of the moving parties if
those expenses are recoverable under subdivision (c), the court upon application of the purchasing parties, either in the pending action or in a proceeding initiated in the superior court of the proper county by the purchasing parties in the case of a voluntary election to wind up and dissolve, shall stay the winding up and dissolution proceeding and shall proceed to ascertain and fix the fair value of the shares owned by the moving parties.
(c)The court shall appoint three disinterested appraisers to appraise the fair value of the shares owned by the moving parties, and shall make an order referring the matter to the appraisers so appointed for the purpose of ascertaining the value. The order shall prescribe the time and manner of producing evidence, if evidence is required. The award of the appraisers or of a majority of
them, when confirmed by the court, shall be final and conclusive upon all parties. The court shall enter a decree, which shall provide in the alternative for winding up and dissolution of the corporation unless payment is made for the shares within the time specified by the decree. If the purchasing parties do not make payment for the shares within the time specified, judgment shall be entered against them and the surety or sureties on the bond for the amount of the expenses (including attorneys’ fees) of the moving parties. Any shareholder aggrieved by the action of the court may appeal the court’s decision.
(d)If the purchasing parties desire to prevent the winding up and dissolution, they shall pay to the moving parties the value of their shares ascertained and decreed within the time specified pursuant to this section, or, in case of an
appeal, as fixed on appeal. On receiving payment or the tender thereof, the moving parties shall transfer their shares to the purchasing parties.
(e)For the purposes of this section, “shareholder” includes a beneficial owner of shares who has entered into an agreement under Section 300 or 706.
(f)For the purposes of this section, the valuation date shall be (1) in the case of a suit for involuntary dissolution under Section 1800, the date upon which that action was commenced, or (2) in the case of a proceeding for voluntary dissolution initiated by the vote of shareholders representing only 50 percent of the voting power, the date upon which that proceeding was initiated. However, in either case the court may, upon the hearing of a motion by any party, and for good cause
shown, designate some other date as the valuation date.
Notes of Decisions
Abrams v. Abrams-Rubaloff & Assocs., Inc., 114 Cal. App. 3d 240 (Cal. Ct. App. 1980).
· cites it 8× “(Corp. Code, § 2000.) Harry Abrams (Abrams) appeals the portions of the decree valuing his shares at $355,000 and denying him interest from the date of valuation.”
Davis v. Sheerin, 754 S.W.2d 375 (Tex. App. 1988).
· cites it 2× “Co-op 1987), or as an option available to a majority shareholder to avoid a liquidation order, Cal.Corp. Code § 2000 (West Supp.1988); W.”
Passman v. Torkan, 95 Cal. Daily Op. Serv. 3166 (Cal. Ct. App. 1995).
· cites it 3× “After the trial court determined Torkan held a 20 percent stock ownership interest in the corporation, Iraj elected in lieu of dissolution to purchase Torkan’s interest (Corp. Code, § 2000, subd. (a)). 1 The trial court appointed three appraisers when Iraj and Torkan could not…”
Veyna v. Orange Cnty. Nursery, Inc., 170 Cal. App. 4th 146 (Cal. Ct. App. 2009).
· cites it 2× “(Corp. Code, § 2000.) 1 After reviewing the *149 independent appraisal report, the trial court entered a decree on November 21, 2008, fixing the fair value of the moving parties’ shares and ordering that *150 unless the purchasing party made payment for the shares in cash by…”
Midkiff v. Gingrich, 824 N.E.2d 1144 (Ill. App. Ct. 2005).
· cites it 2× “Cal. Corp. Code § 2000 (a) (West 2002); Minn.”
Coldren v. Hart, King & Coldren, Inc., 239 Cal. App. 4th 237 (Cal. Ct. App. 2015).
“Illustrating this point, Corporations Code section 2000, subdivision (a), permits HKC to elect to buy out Coldren’s shares and specifically provides that this election “may be made by the approval of the outstanding shares [(i.”
Brown v. Allied Corrugated Box Co., 91 Cal. App. 3d 477 (Cal. Ct. App. 1979).
“” (Corp. Code, § 2000, subd. (a).) It would appear from an inspection of the entire record in the case at bench, including the transcript of the in-chambers proceedings, that the majority commissioners did in fact consider the possibility of valuing Allied’s assets as though…”
Ronald v. 4-C's Elec. Packaging, Inc., 168 Cal. App. 3d 290 (Cal. Ct. App. 1985).
· cites it 2× “(Corp. Code, § 2000.) 1 Defendants contend on appeal that; (1) the valuation method used by the majority appraisers and adopted by the trial court was erroneous in that (a) it expressly assumed that the concept of fair value contained in section 2000 is equivalent to fair market…”
In re Orange Cnty. Nursery, Inc., 479 B.R. 863 (Bankr. C.D. Cal. 2012).
· cites it 6× “Pursu *865 ant to Cal. Corp.Code § 2000, on November 21, 2008, after extensive litigation, the Superior Court entered a value of the Minority Voting Trust’s interest (hereafter “Minority”) in the amount of $4,906,475, plus interest to the date of judgment for a total of…”
Ovadia v. Abdullah, 94 Cal. Daily Op. Serv. 3190 (Cal. Ct. App. 1994).
“1 Corporations Code section 2000 provides in relevant part: “(a) Subject to any contrary provision in the articles, in any suit for involuntary dissolution, or in any proceeding for voluntary dissolution initiated by the vote of shareholders representing only 50 percent of the…”
In re Orange Cnty. Nursery, Inc., 484 B.R. 219 (Bankr. C.D. Cal. 2012).
· cites it 2× “1 Pursuant to Cal. Corp.Code § 2000, on November 21, 2008, after extensive litigation, the Superior Court valued the Minority Voting Trust’s (hereafter “Minority”) 40.”
Nelson v. Hills, 2022 UT 6 (Utah 2022).
“Rights related to the judicial dissolution of a limited liability company are conferred by statute, and to have standing to assert statutory rights under the traditional test, a party‟s alleged injury (1) must be distinct and palpable and (2) must fall within the “zone of…”
Crane v. R. R. Crane Inv. Corp., Inc. (Cal. Ct. App. 2022).
· cites it 3× “) Our review of Corporations Code section 2000’s legislative history revealed no discussion about, or consideration of, prejudgment interest.”
Allal v. Halvas CA2/8 (Cal. Ct. App. 2014).
· cites it 3× “” Corporations Code section 2000 does not require that the appraisers rely only on audited financial statements.”
Midkiff v. Gingrich (Ill. App. Ct. 2005).
· cites it 2× “Cal. Corp. Code §2000 (a) (West 2002); Minn.”
Guttman v. Guttman (Cal. Ct. App. 2021).
“) 6 The corporate buyout statute discussed in Ontiveros— Corporations Code section 2000—is substantially similar for our purposes to section 15908.”
In Re Orange Cnty. Nursery, Inc. (C.D. Cal. 2019).
“On June 29, 2007, Appellant and/or the Majority Voting Trust notified the Superior Court of its/their election under California Corporations Code section 2000 to purchase 1 In Case Number ED CV 18-232-DMG, Appellant Orange County Nursey, Inc.”
In re Orange Cnty. Nursery, Inc. (C.D. Cal. 2019).
“On June 29, 2007, Appellant and/or the Majority Voting Trust notified the Superior Court of its/their election under California Corporations Code section 2000 to purchase 1 In Case Number ED CV 18-232-DMG, Appellant Orange County Nursey, Inc.”
(BK) In Re: Clark (E.D. Cal. 2019).
“Clark’s shares pursuant to California Corporations Code § 2000 (“§ 2000”) 17 in the Superior Court for the County of Solano.”
— Cal. Corporations Code § 2000(a) — 3 cases
In re Orange Cnty. Nursery, Inc., 479 B.R. 863 (Bankr. C.D. Cal. 2012).
“Pursu *865 ant to Cal. Corp.Code § 2000, on November 21, 2008, after extensive litigation, the Superior Court entered a value of the Minority Voting Trust’s interest (hereafter “Minority”) in the amount of $4,906,475, plus interest to the date of judgment for a total of…”
— Cal. Corporations Code § 2000(b) — 1 case
— Cal. Corporations Code § 2000(c) — 3 cases
In re Orange Cnty. Nursery, Inc., 479 B.R. 863 (Bankr. C.D. Cal. 2012).
“Pursu *865 ant to Cal. Corp.Code § 2000, on November 21, 2008, after extensive litigation, the Superior Court entered a value of the Minority Voting Trust’s interest (hereafter “Minority”) in the amount of $4,906,475, plus interest to the date of judgment for a total of…”
In re Orange Cnty. Nursery, Inc., 484 B.R. 219 (Bankr. C.D. Cal. 2012).
“1 Pursuant to Cal. Corp.Code § 2000, on November 21, 2008, after extensive litigation, the Superior Court valued the Minority Voting Trust’s (hereafter “Minority”) 40.”
— Cal. Corporations Code § 2000(f) — 1 case
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