Florida Statute 607.1436 | Lawyer Caselaw & Research

The 2024 Florida Statutes

Title XXXVI
BUSINESS ORGANIZATIONS

Chapter 607
FLORIDA BUSINESS CORPORATION ACT

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F.S. 607.1436

607.1436 Election to purchase instead of dissolution.—

(1) In a proceeding under s. 607.1430(1)(b), the corporation may elect or, if it fails to elect, one or more shareholders may elect to purchase all shares owned by the petitioning shareholder at the fair value of the shares. An election pursuant to this section shall be irrevocable unless the court determines that it is equitable to set aside or modify the election.

(2) 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 s. 607.1430(1)(b) or at such later time as the court in its discretion may allow. If the election to purchase is filed by one or more shareholders, the corporation shall, within 10 days thereafter, give written notice to all shareholders, other than the petitioner. The notice must state the name and number of shares owned by the petitioner and the name and number of shares owned by each electing shareholder and must advise the recipients of their right to join in the election to purchase shares in accordance with this section. Shareholders who wish to participate must file notice of their intention to join in the purchase no later than 30 days after the effective date of the notice to them. All shareholders 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 shares 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 shareholders, the proceeding under s. 607.1430(1)(b) may not be discontinued or settled, nor may the petitioning shareholder sell or otherwise dispose of his or her shares, unless the court determines that it would be equitable to the corporation and the shareholders, other than the petitioner, to permit such discontinuance, settlement, sale, or other disposition.

(3) If, within 60 days after the filing of the first election, the parties reach agreement as to the fair value and terms of the purchase of the petitioner’s shares, the court shall enter an order directing the purchase of the petitioner’s shares upon the terms and conditions agreed to by the parties.

(4) If the parties are unable to reach an agreement as provided for in subsection (3), the court, upon application of any party, may stay the proceeding to dissolve under s. 607.1430(1)(b) and shall, whether or not the proceeding is stayed, determine the fair value of the petitioner’s shares as of the day before the date on which the petition under s. 607.1430 was filed or as of such other date as the court deems appropriate under the circumstances.

(5) Upon determining the fair value of the shares, the court shall enter an order directing the purchase upon such terms and conditions as the court deems appropriate, which may include payment of the purchase price in installments, when necessary in the interests of equity, provision for security to assure payment of the purchase price and any additional costs, fees, and expenses as may have been awarded, and, if the shares are to be purchased by shareholders, the allocation of shares among such shareholders. In allocating the petitioner’s shares among holders of different classes of shares, the court shall attempt to preserve any existing distribution of voting rights among holders of different classes and series insofar as practicable and may direct that holders of any 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; however, if the court finds that the refusal of the petitioning shareholder 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 shareholder had probable grounds for relief under s. 607.1430(1)(b), it may award expenses to the petitioning shareholder, including reasonable fees and expenses of counsel and of any experts employed by petitioner.

(6) The entry of an order under subsection (3) or subsection (5) shall be subject to the provisions of subsection (8), and the order shall not be entered unless and until the award is determined by the court to be permitted under the provisions of subsection (8). In determining compliance with s. 607.06401, the court may rely on an affidavit from the corporation as to compliance with that section as of the measurement date. Upon entry of an order under subsection (3) or subsection (5), the court shall dismiss the petition to dissolve the corporation under s. 607.1430(1)(b) and the petitioning shareholder shall no longer have any rights or status as a shareholder 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.

(7) The purchase ordered pursuant to subsection (5) shall be made within 10 days after the date the order becomes final.

(8) Any payment by the corporation pursuant to an order under subsection (3) or subsection (5), other than an award of fees and expenses pursuant to subsection (5), is subject to the provisions of s. 607.06401. Unless otherwise provided in the court’s order, the effect of the distribution under s. 607.06401 shall be measured as of the date of the court’s order under subsection (3) or subsection (5).

History.—s. 11, ch. 94-327; s. 36, ch. 97-102; s. 195, ch. 2019-90.

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Amendments to 607.1436

Arrestable Offenses / Crimes under Fla. Stat. 607.1436

Level: Degree
Misdemeanor/Felony: First/Second/Third

Current data shows no reason an arrest or criminal charge should have occurred directly under Florida Statute 607.1436.

Annotations, Discussions, Cases:

Cases Citing Statute 607.1436

Total Results: 10

Mary Virginia Graham v. Constance R. Uphold and Barmarrae Books, Inc.

Court: District Court of Appeal of Florida | Date Filed: 2018-04-30

Citation: 245 So. 3d 964

Snippet: initiated, Dr. Graham filed a notice under section 607.1436, Florida Statutes, electing to purchase all of

Fountas v. Microcomputer Resources, Inc.

Court: District Court of Appeal of Florida | Date Filed: 2013-02-27

Citation: 110 So. 3d 471, 2013 Fla. App. LEXIS 3200, 2013 WL 692442

Snippet: statutory right to purchase John’s shares. See § 607.1436(1), *472Fla. Stat. (2006). MCR also asserted claims

Jones v. Pfaff

Court: District Court of Appeal of Florida | Date Filed: 2012-01-20

Citation: 77 So. 3d 884, 2012 Fla. App. LEXIS 669, 2012 WL 163915

Snippet: erred, it did so in its application of section 607.1436, which is the correct law. Therefore, cer-tiorari

Oliver v. Stone

Court: District Court of Appeal of Florida | Date Filed: 2006-10-25

Citation: 940 So. 2d 526, 2006 WL 3019832

Snippet: interest in the corporation pursuant to section 607.1436. During the discovery phase of this lawsuit, Mr

Morales v. Rosenberg

Court: District Court of Appeal of Florida | Date Filed: 2005-10-12

Citation: 919 So. 2d 476, 2005 WL 2509895

Snippet: to purchase Morales' shares pursuant to section 607.1436(1) of the Act. Because the parties could not agree

Timko v. Triarsi

Court: District Court of Appeal of Florida | Date Filed: 2005-02-11

Citation: 898 So. 2d 89, 2005 WL 320703

Snippet: Enterprises had elected their right under section 607.1436, Florida Statutes (2000), to purchase the interest

G & G Fashion Design, Inc. v. Garcia

Court: District Court of Appeal of Florida | Date Filed: 2004-02-11

Citation: 870 So. 2d 870, 2004 WL 305741

Snippet: & G. Ghilardi and Younkin, pursuant to section 607.1436 of the Florida Statutes, elected to purchase Garcia's

Fierro v. Templeton

Court: District Court of Appeal of Florida | Date Filed: 2003-09-24

Citation: 857 So. 2d 931, 2003 Fla. App. LEXIS 14375, 2003 WL 22190909

Snippet: purchase Temple-ton’s shares, pursuant to section 607.1436, *933Florida Statutes (2001). The court found

Munshower v. Kolbenheyer

Court: District Court of Appeal of Florida | Date Filed: 1999-03-17

Citation: 732 So. 2d 385, 1999 WL 140725

Snippet: of Munshower's shares, as required by section 607.1436(1), Florida Statutes (1997), "[a] discount for

County Collection Services, Inc. v. Lassiter

Court: District Court of Appeal of Florida | Date Filed: 1997-03-26

Citation: 689 So. 2d 1299, 1997 Fla. App. LEXIS 2795, 1997 WL 134310

Snippet: light of their purported election under section 607.1436 to purchase the stock of the complaining shareholders