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2018 Georgia Code 14-2-641 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 14-2-641 Case Law from Google Scholar Amendments to OCGA 14-2-641

TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

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

ARTICLE 6 SHARES AND DISTRIBUTIONS

14-2-641. Effect of failure to present securities for redemption, surrender, cancellation, or payment.

  1. As used in this Code section, the term:
    1. "Call" means a notice or demand, pursuant to a right contained in the articles of incorporation, resolution of the board of directors, or other document governing rights and preferences of shares or other securities, to redeem, cancel, or otherwise extinguish a part or all of a class or series of securities of an issuing corporation.
    2. "Registered holder" means the holder or owner of shares or other securities as shown upon the records maintained by or on behalf of the issuer for that purpose.
    3. "Redemption" includes the surrender, cancellation, or payment in satisfaction of or with respect to shares or other securities by an issuer.
  2. When a corporation has duly and properly called for redemption of any securities and the registered holder of the securities has been sent notice of call at his or her last address as it appears on the records of the corporation but fails to present the certificate for the securities or otherwise take action as required by the call within 60 days of the effective date of the call or such longer time as may be specified in the notice of the call, then the corporation may transfer the money or other property distributable upon the redemption to a trustee, for the benefit of the registered owner or his or her successors in title, and thereupon the securities shall be deemed as of the effective date of the call to have been redeemed, canceled, or paid and no longer outstanding.
  3. In order for the transfer to the trustee permitted by subsection (b) of this Code section to be effective for this purpose, the corporation must have adopted a plan therefor prior to the call, and must have sent notice to the registered holder of the securities of the details of the plan, including the name and address of the trustee, at the time of the sending of the notice of the call. The registered holder for whom the transfer in trust is made or his or her successors in title shall have only the right to obtain the money or other property from the trustee:
    1. In the case of certificated securities, upon surrender to the trustee of the certificates involved; and
    2. In the case of uncertificated securities, upon satisfying the trustee that he or she was the registered holder.
  4. Any money or other property held by the trustee which is not claimed by the registered holder within six years from the date of the transfer to the trustee shall be distributed to the persons and in the manner provided in the plan previously adopted or, if the provisions for distribution are held to be invalid or the plan does not contain provisions for distribution, shall be distributed to and become the property of the Board of Regents of the University System of Georgia, to be used for educational purposes. The trustee appointed under this Code section must be a bank or trust company located in the State of Georgia.
  5. The procedures specified in subsections (b) through (d) of this Code section shall not be exclusive of other procedures, not otherwise inconsistent with law, specified in the articles of incorporation, including an amendment of the articles of incorporation adopted by the board of directors establishing and designating a series of preferred shares and fixing and determining the relative rights and preferences of a series of preferred shares, or in the instruments governing any other securities, with respect to the redemption of the securities, and, upon compliance by a corporation with any of those procedures, the shares or other securities shall be deemed as of the date provided in those procedures to have been redeemed, canceled, and no longer to be outstanding, regardless of whether the holders thereof shall have taken the steps provided in this Code section.

(Code 1981, §14-2-641, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 2004, p. 508, § 7.)

COMMENT

Source: Former § 14-2-98. There is no counterpart in the Model Act. This section provides a non-exclusive method for canceling redeemable securities which are not surrendered within a minimum of 60 days after the issuing corporation has called for their redemption. If a plan for transfer of funds or other property distributable upon cancellation or redemption is adopted by the corporation prior to the notice of the call, and is properly described in the notice, the effect is to cancel the securities effective as of the call date. The term "securities" is not defined, but is intended to be read broadly to include any instruments that might be defined as securities under the Georgia Securities Act of 1973, including such promissory notes and commercial paper as are treated as securities in § 10-5-2(a)(16). For certificated securities, the triggering event is the failure to present any certificates required by the call, whether for shares or bonds or debentures. In the case of uncertificated securities, the issuer can require such documentation as is appropriate under the Uniform Commercial Code or other applicable law. Holders are given six years within which to claim their property. After the lapse of six years, property remaining in the hands of a trustee may be distributed according to the plan, or if no plan of distribution has been adopted, the property shall be distributed to the Board of Regents of the University System of Georgia.

This section does not provide for notice to the holders of registered security interests under recent revisions to Article 8 of the Uniform Commercial Code.

Note to 2004 Amendment Prior to the 2004 amendments, notices under this Code section were required to be "mailed". The 2004 amendments, which change such references from "mailed" to "sent", seek to harmonize this Code section with those amendments to this Chapter which contemplate notice by electronic transmission.

Cross-References "Distribution" defined, see § 14-2-140. Effective date of notice, see § 14-2-141. Record date, see § 14-2-707. Redemption, see §§ 14-2-601 &14-2-631. "Shares" defined, see § 14-2-140. Voting of shares called for redemption, see § 14-2-721.

RESEARCH REFERENCES

Am. Jur. 2d.

- 18A Am. Jur. 2d, Corporations, §§ 447 et seq.

C.J.S.

- 18 C.J.S., Corporations, §§ 245, 246, 247.

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