351.405. Rights of dissenting shareholder — sale or exchange of assets. — 1. In the event that a sale or exchange of all or substantially all of the property and assets of a corporation, otherwise than in the usual and regular course of its business, is authorized by a vote of the shareholders of the corporation, except as provided in subsection 6 of this section, any shareholder who shall not have voted in favor thereof and who at or prior to the meeting at which said sale or exchange is submitted to a vote shall file with the corporation written objection thereto may, within twenty days after the vote was taken, make written demand on the corporation for the payment to him of the fair value of his shares as of the day prior to the date on which the vote was taken authorizing the sale or exchange. Such demand shall state the number and class of the shares owned by such dissenting shareholder. Any shareholder failing to make demand within the twenty-day period shall be conclusively presumed to have consented to the sale or exchange and shall be bound by the terms thereof.
2. If, within thirty days after the date on which such vote was taken, the value of such shares is agreed upon between the dissenting shareholder and the corporation, the corporation shall make payment of the agreed value within ninety days after the date on which the vote was taken authorizing the sale or exchange, upon the surrender of his certificate or certificates representing said shares. Upon payment of the agreed value, the dissenting shareholder shall cease to have any interest in such shares or in the corporation.
3. If within such period of thirty days the shareholder and the corporation do not so agree, then the dissenting shareholder may, within sixty days after the expiration of the thirty-day period, file a petition in any court of competent jurisdiction within the county in which the registered office of the corporation is situated asking for a finding and determination of the fair value of such shares, and shall be entitled to judgment against the corporation for the amount of such fair value as of the day prior to the date on which such vote was taken, together with interest thereon to the date of such judgment. The judgment shall be payable only upon and simultaneously with the surrender to the corporation of the certificate or certificates representing said shares. Upon the payment of the judgment, the dissenting shareholder shall cease to have any interest in such shares or in the corporation. Unless the dissenting shareholder shall file such petition within the time herein limited, such shareholder and all persons claiming under him shall be conclusively presumed to have approved and ratified the sale or exchange and shall be bound by the terms thereof.
4. The rights of a dissenting shareholder to be paid the fair value of his shares as herein provided shall cease if and when the corporation shall abandon the sale or exchange or the shareholders shall revoke the authority to make such sale or exchange.
5. Shares acquired by the corporation pursuant to the payment of the agreed value thereof or to the payment of judgment entered therefor, as in this section provided, may be held and disposed of by the corporation as it shall see fit.
6. This section shall not apply to any sale, exchange or other disposition of assets of a corporation authorized by a vote of the shareholders of the corporation if, prior to or in connection with such authorization, the shareholders have consented to or approved the voluntary dissolution of the corporation pursuant to section 351.464 or 351.466, if the sale, exchange or other disposition is made in liquidation of the corporation's business and affairs as provided in section 351.476.
Notes of Decisions
Dreiseszun v. FLM Indus., Inc., 577 S.W.2d 902 (Mo. Ct. App. 1979).
· cites it 21× “Thus, they protected their rights for judicial determination of “fair value” of their stock under Section 351.405 RSMo 1969. The sale of the assets and change of corporate name were approved and the prior approval of the Board of Directors was ratified by a majority of the…”
Flarsheim v. Twenty Five Thirty Two Broadway Corp., 432 S.W.2d 245 (Mo. 1968).
· cites it 15× “” The plaintiff’s petition filed May 10, 1966, briefly stated the facts and alleged that the action was brought pursuant to § 351.405. In its answer filed June 3, 1966, the defendant admitted the allegations of the petition and further alleged that the fair value of the shares…”
Swope v. Siegel-Robert, Inc., 74 F. Supp. 2d 876 (E.D. Mo. 1999).
· cites it 13× “Defendant vigorously disputes any reliance on Flarsheim because it involved a fair value determination under § 351.405, not § 351.455. R.S.Mo. § 351.405 provides that a dissenting shareholder may demand fair value of his or her shares after properly objecting to the sale or…”
Braun v. Lorenz, 585 S.W.2d 102 (Mo. Ct. App. 1979).
· cites it 3× “Respondent also was aware of rights available to him under Section 351.405, RSMo 1969 as a shareholder dissenting from the merger plan and that payment of the fair value of his Oil Co.”
In Re Landau Boat Co., 13 B.R. 788 (Bankr. W.D. Mo. 1981).
· cites it 2× “The rights of the dissenting shareholders are defined in Section 351.405, R.S. Mo.1969. It is apparent, as a matter of Missouri law, that Reynolds as a creditor has no standing to challenge the disposition by Directional Industries for its Landau stock.”
King v. F.T.J., Inc., 765 S.W.2d 301 (Mo. Ct. App. 1988).
· cites it 2× “Although the court in Dreisesz-un was confronted with a determination of fair value under § 351.405 relating to the right of a dissenting shareholder in the event of a sale or exchange of all or substantially all of a corporation’s assets, the court in Dreiseszun does extend the…”
Still v. Travelers Indem. Co., 374 S.W.2d 95 (Mo. 1963).
· cites it 2× “The object of this provision is made clearer yet by Section 351.405 which establishes the procedure whereby the rights of a dissenting shareholder are protected in a transaction of this type.”
Santa Fe Hills Golf & Country Club v. Safehi Realty Co., 349 S.W.2d 27 (Mo. 1961).
· cites it 2× “Section 351.405 provides that, in the event “a sale or exchange of all or substantially all of the property and assets of a corporation, otherwise than in the usual and regular course of its business, is authorized by a vote of the shareholders of the corporation”, a dissenting…”
Hunter v. Mitek Indus., 721 F. Supp. 1102 (E.D. Mo. 1989).
“Although the Dreiseszun case involved "a determination of fair value under § 351.405 relating to the right of a dissenting shareholder in the event of a sale or exchange of all or substantially all of a corporation's assets, the court in Dreiseszun does extend the effect of its…”
Theodore Pullen, Edgar Pullen, Freddie Pullen, & Elisha Pullen v. Timothy Flowers, Kimberly Ann Flowers, Stanley C. Flowers, Tr. of the Stanley C. Flowers Revocable Trust Dated 12/09/2005, Kenneth R. Bell, Debra J. Bell, & the Bell Fam. P'ship, Defendants-respondents., 509 S.W.3d 131 (Mo. Ct. App. 2016).
· cites it 9× “As relevant to the present case, Section 351.400 requires written notice of the shareholders’ meeting at which the decision is to be made and, at that meeting, “the affirmative vote of the holders of at least two-thirds of the outstanding shares entitled to vote at such meeting[.”
Theodore Pullen, Edgar Pullen, Freddie Pullen, & Elisha Pullen v. Timothy Flowers, Kimberly Ann Flowers, Stanley C. Flowers, Tr. of the Stanley C. Flowers Revocable Trust Dated 12/09/2005, Kenneth R. Bell, Debra J. Bell, & the Bell Fam. P'ship, Defendants-respondents. (Mo. Ct. App. 2016).
· cites it 9× “As relevant to the present case, Section 351.400 requires written notice of the shareholders' meeting at which the decision is to be made and, at that meeting, "the affirmative vote of the holders of at least two-thirds of the outstanding shares entitled to vote at such meeting[.”
Pendergrass v. Pendergrass Enter., Inc., 367 S.W.3d 680 (Mo. Ct. App. 2012).
· cites it 4× “(“Pendergrass Enterprises”), filed its “Motion to Dismiss” Pendergrass’s Petition for failure to comply with section 351.405. 2 The Motion to Dismiss claimed Pendergrass failed to make written demand on Pendergrass Enterprises for payment of the fair value of Pendergrass’s…”
— Mo. Rev. Stat. § 351.405(3) — 2 cases
Dreiseszun v. FLM Indus., Inc., 577 S.W.2d 902 (Mo. Ct. App. 1979).
“Thus, they protected their rights for judicial determination of “fair value” of their stock under Section 351.405 RSMo 1969. The sale of the assets and change of corporate name were approved and the prior approval of the Board of Directors was ratified by a majority of the…”
Swope v. Siegel-Robert, Inc., 74 F. Supp. 2d 876 (E.D. Mo. 1999).
“Defendant vigorously disputes any reliance on Flarsheim because it involved a fair value determination under § 351.405, not § 351.455. R.S.Mo. § 351.405 provides that a dissenting shareholder may demand fair value of his or her shares after properly objecting to the sale or…”
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