TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Section 2. Business Corporations, 14-2-101 through 14-2-1703.

ARTICLE 13 DISSENTERS' RIGHTS

14-2-1330. Court action.

1. If a demand for payment under Code Section 14-2-1327 remains unsettled, the corporation shall commence a proceeding within 60 days after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within the 60 day period, it shall pay each dissenter whose demand remains unsettled the amount demanded.
2. The corporation shall commence the proceeding, which shall be a nonjury equitable valuation proceeding, in the superior court of the county where a corporation's registered office is located. If the surviving corporation is a foreign corporation without a registered office in this state, it shall commence the proceeding in the county in this state where the registered office of the domestic corporation merged with or whose shares were acquired by the foreign corporation was located.
3. The corporation shall make all dissenters, whether or not residents of this state, whose demands remain unsettled parties to the proceeding, which shall have the effect of an action quasi in rem against their shares.The corporation shall serve a copy of the petition in the proceeding upon each dissenting shareholder who is a resident of this state in the manner provided by law for the service of a summons and complaint, and upon each nonresident dissenting shareholder either by registered or certified mail or statutory overnight delivery or by publication, or in any other manner permitted by law.
4. The jurisdiction of the court in which the proceeding is commenced under subsection (b) of this Code section is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. The appraisers have the powers described in the order appointing them or in any amendment to it. Except as otherwise provided in this chapter, Chapter 11 of Title 9, known as the "Georgia Civil Practice Act," applies to any proceeding with respect to dissenters' rights under this chapter.
5. Each dissenter made a party to the proceeding is entitled to judgment for the amount which the court finds to be the fair value of his shares, plus interest to the date of judgment.

(Code 1981, §14-2-1330, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 61; Ga. L. 1993, p. 1231, § 20; Ga. L. 2000, p. 1589, § 3.)

COMMENT

Source: Model Act, § 13.30. Section14-2-1330 retains the concept of judicial appraisal as the ultimate means of determining fair value. It thus follows the basic pattern of former § 14-2-251(g).

Subsection (a) requires the proceeding to be commenced by the corporation within 60 days after receiving a demand for payment under Section14-2-1327. Subsection (a) makes this time period critical; if the proceeding is not commenced within this period the corporation must pay the additional amounts demanded by the shareholders under Section14-2-1327. See the Comment to that section. Former law merely provided that dissenters may begin an action if the corporation failed to do so. See former § 14-2-251(g)(2). Each shareholder may sue directly for this amount, if necessary, and in an appropriate case may be entitled to charge the corporation with the costs of suit. See Section14-2-1331.

Subsections (b) and (c) provide that all demands for payment made under Section14-2-1327 are to be resolved in a single proceeding brought in the county where the corporation's registered office is located. All shareholders making Section14-2-1327 demands must be made parties, with service by publication authorized if necessary. Subsection (b) of the Model Act was amended to add the word "surviving" before "corporation" in the second sentence. This is intended to clarify the application of the dissenters' rights article - that it applies only to shareholders of Georgia corporations, but that their rights may be claims against a surviving corporation which is a foreign corporation. Subsection (c) was amended to restore language from former § 14-2-251(g)(3), which expressly provided that the action was quasi in rem against the shares.

Subsection (d) provides that appraisers may be appointed within the discretion of the court.

Subsection (e) provides that the final judgment establishes not only the fair value of the shares in the abstract but also determines how much each shareholder who made a Section 14-2-1327 demand should actually receive. The Model Act provision was amended to conform to previous Code changes in the Model Act, that eliminated a payment by the corporation before agreement is reached on the amount, and eliminated dissenters' rights for holders of after acquired shares.

Note to 1989 Amendment The 1989 amendment to subsection (b) added the phrase "which shall be a non-jury equitable valuation proceeding," to clarify the nature of the proceeding. Appraisal proceedings have traditionally been proceedings in equity, with appraisers appointed to assist the court in determining fair value.

Note to 1993 Amendment The 1993 amendment changed the notice by publication to be optional rather than mandatory, so that the corporation may choose to serve non-resident dissenting shareholders either by registered or certified mail or by publication, and no longer requires both methods.

Cross-References "Dissenter" defined, see § 14-2-1301. "Fair value" defined, see § 14-2-1301. "Interest" defined, see § 14-2-1301. "Person" defined, see § 14-2-140. "Principal office": defined, see § 14-2-140; designated in annual registration, see § 14-2-1622. "Proceeding" defined, see § 14-2-140. Registered office: designated in annual registration, see § 14-2-1622; required, see §§ 14-2-202 &14-2-501.