Pa. Cons. Stat. » 15 Pa. Cons. Stat. (CORPORATIONS) / Chapter 15

15 Pa. Cons. Stat. § 1571

 Application and effect of subchapter.

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SUBCHAPTER D

DISSENTERS RIGHTS

 

Sec.

1571.  Application and effect of subchapter.

1572.  Definitions.

1573.  Record and beneficial holders and owners.

1574.  Notice of intention to dissent.

1575.  Notice to demand payment.

1576.  Failure to comply with notice to demand payment, etc.

1577.  Release of restrictions or payment for shares.

1578.  Estimate by dissenter of fair value of shares.

1579.  Valuation proceedings generally.

1580.  Costs and expenses of valuation proceedings.

 

Cross References.  Subchapter D is referred to in sections 102, 317, 321, 329, 333, 343, 353, 363, 1103, 1105, 1906, 1913, 1932, 2104, 2123, 2321, 2324, 2325, 2512, 2538, 2704, 2705, 2904, 2907, 7104 of this title.

§ 1571.  Application and effect of subchapter.

(a)  General rule.--Except as otherwise provided in subsection (b), any shareholder (as defined in section 1572 (relating to definitions)) of a business corporation shall have the rights and remedies provided in this subchapter in connection with a transaction under this title only where this title expressly provides that a shareholder shall have the rights and remedies provided in this subchapter. See:

Section 329(c) (relating to special treatment of interest holders).

Section 333 (relating to approval of merger).

Section 343 (relating to approval of interest exchange).

Section 353 (relating to approval of conversion).

Section 363 (relating to approval of division).

Section 1906(c) (relating to dissenters rights upon special treatment).

Section 1932(c) (relating to dissenters rights in asset transfers).

Section 2104(b) (relating to procedure).

Section 2324 (relating to corporation option where a restriction on transfer of a security is held invalid).

Section 2325(b) (relating to minimum vote requirement).

Section 2704(c) (relating to dissenters rights upon election).

Section 2705(d) (relating to dissenters rights upon renewal of election).

Section 2904(b) (relating to procedure).

Section 2907(a) (relating to proceedings to terminate breach of qualifying conditions).

Section 7104(b)(3) (relating to procedure).

(b)  Exceptions.--

(1)  Except as otherwise provided in paragraph (2), the holders of the shares of any class or series of shares shall not have the right to dissent and obtain payment of the fair value of the shares under this subchapter if, on the record date fixed to determine the shareholders entitled to notice of and to vote at the meeting at which a plan specified in any of section 333, 343, 353, 363 or 1932(c) is to be voted on or on the date of the first public announcement that such a plan has been approved by the shareholders by consent without a meeting, the shares of the class or series are either:

(i)  listed on a national securities exchange registered under section 6 of the Exchange Act; or

(ii)  held beneficially or of record by more than 2,000 persons.

(2)  Paragraph (1) shall not apply to and dissenters rights shall be available without regard to the exception provided in that paragraph in the case of:

(i)  (Repealed).

(ii)  Shares of any preferred or special class or series unless the articles, the plan or the terms of the transaction entitle all shareholders of the class or series to vote thereon and require for the adoption of the plan or the effectuation of the transaction the affirmative vote of a majority of the votes cast by all shareholders of the class or series.

(iii)  Shares entitled to dissenters rights under section 329(d) or 1906(c) (relating to dissenters rights upon special treatment).

(3)  The shareholders of a corporation that acquires by purchase, lease, exchange or other disposition all or substantially all of the shares, property or assets of another corporation by the issuance of shares, obligations or otherwise, with or without assuming the liabilities of the other corporation and with or without the intervention of another corporation or other person, shall not be entitled to the rights and remedies of dissenting shareholders provided in this subchapter regardless of the fact, if it be the case, that the acquisition was accomplished by the issuance of voting shares of the corporation to be outstanding immediately after the acquisition sufficient to elect a majority or more of the directors of the corporation.

(c)  Grant of optional dissenters rights.--The bylaws or a resolution of the board of directors may direct that all or a part of the shareholders shall have dissenters rights in connection with any corporate action or other transaction that would otherwise not entitle such shareholders to dissenters rights. See section 317 (relating to contractual dissenters rights in entity transactions).

(d)  Notice of dissenters rights.--Unless otherwise provided by statute, if a proposed corporate action that would give rise to dissenters rights under this subpart is submitted to a vote at a meeting of shareholders, there shall be included in or enclosed with the notice of meeting:

(1)  a statement of the proposed action and a statement that the shareholders have a right to dissent and obtain payment of the fair value of their shares by complying with the terms of this subchapter; and

(2)  a copy of this subchapter.

(e)  Other statutes.--The procedures of this subchapter shall also be applicable to any transaction described in any statute other than this part that makes reference to this subchapter for the purpose of granting dissenters rights.

(f)  Certain provisions of articles ineffective.--This subchapter may not be relaxed by any provision of the articles, except that the articles may limit or eliminate dissenters rights for a class or series of shares entitled to a preference. If a limitation or elimination is added by amendment, the limitation or elimination shall not apply to shares that are outstanding on the effective date of the amendment or that are issuable pursuant to a conversion, exchange or other right exercisable on the effective date of the amendment.

(g)  Computation of beneficial ownership.--For purposes of subsection (b)(1)(ii), shares that are held beneficially as joint tenants, tenants by the entireties, tenants in common or in trust by two or more persons, as fiduciaries or otherwise, shall be deemed to be held beneficially by one person.

(h)  Cross references.--See:

Section 315 (relating to nature of transactions).

Section 1105 (relating to restriction on equitable relief).

Section 1763(c) (relating to determination of shareholders of record).

Section 2512 (relating to dissenters rights procedure).

(Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)

 

2022 Amendment.  Act 122 amended subsecs. (b)(1) intro. par. and (f).

2014 Amendment.  Act 172 amended subsecs. (a), (b), (c) and (h).

2001 Amendment.  Act 34 amended subsecs. (a) and (b), amended and relettered subsec. (g) to subsec. (h) and added present subsec. (g).

1990 Amendment.  Act 198 amended subsecs. (a), (b) and (e), relettered subsec. (f) to subsec. (g) and added present subsec. (f).

Cross References.  Section 1571 is referred to in sections 317, 1103, 2537 of this title.

Notes of Decisions
Cited in 6 cases, 1996–2013 · leading case: Mitchell Partners, L.P. v. Irex Corp.
Sort: Relevance Newest Treatment
Mitchell Partners, L.P. v. Irex Corp. (2011) ca3 · cites it 8× “" 15 Pa. Cons.Stat. § 1571. This appraisal remedy is to be pursued in a state court action initiated by the corporation against the dissenting shareholder after the shareholder has dissented and after the merger has been consummated.”
Mitchell Partners, L.P. v. Irex Corp. (2012) pa “The appraisal remedy provided in Sections 1571-1580, 15 Pa.C.S. § 1571, is designed to protect dissenting shareholders by valuing their shares, see O’Connor Appeal, 452 Pa.”
Gill v. Gill (1996) pasuperct “See 15 Pa.C.S. § 1571. Accordingly, we remand to the trial court both to re-evaluate and to substantiate its basis for favoring an in-kind distribution and for rejecting Wife’s request to be granted the option to compel a buy-out of the closely held stock of Dolby and the Auto…”
First Union National Bank v. Quality Carriers Inc. (2000) pactcomplphilad “…a basis for objections 2 and 3, which address Counts I and VI. . 15 Pa.C.S. §1571 etseq. . 15 Pa.C.S. §1904. . 15 Pa.C.S. §1105. . It is important to note that Jone”
Colorcon, Inc. v. United States (2013) uscfc “§ 1930, which entitle qualifying shareholders “to dissent from, and obtain payment of, the fair value of [their] shares in the event of, any corporate action_” 15 Pa.C.S. § 1571. 7 *654 The payment is designed as a measure of “the fair value of shares immediately before the…”
Butler v. Provident Mutual Life Insurance (1999) pactcomplphilad · cites it 7× “” 15 Pa.C.S. §1571 (b)(2)(i). (emphasis added) *495 The plaintiff argues that the so-called “market exception” to dissenters’ rights does not apply to Provident’s transaction because the shares (memberships) are not exchanged solely for shares (memberships) of the acquiring…”
— 15 Pa. Cons. Stat. § 1571(a) — 1 case
Butler v. Provident Mutual Life Insurance (1999) pactcomplphilad “” 15 Pa.C.S. §1571 (b)(2)(i). (emphasis added) *495 The plaintiff argues that the so-called “market exception” to dissenters’ rights does not apply to Provident’s transaction because the shares (memberships) are not exchanged solely for shares (memberships) of the acquiring…”
— 15 Pa. Cons. Stat. § 1571(b)(2)(i) — 1 case
Butler v. Provident Mutual Life Insurance (1999) pactcomplphilad “” 15 Pa.C.S. §1571 (b)(2)(i). (emphasis added) *495 The plaintiff argues that the so-called “market exception” to dissenters’ rights does not apply to Provident’s transaction because the shares (memberships) are not exchanged solely for shares (memberships) of the acquiring…”
— 15 Pa. Cons. Stat. § 1571(b)(l)(ii) — 1 case
Butler v. Provident Mutual Life Insurance (1999) pactcomplphilad “” 15 Pa.C.S. §1571 (b)(2)(i). (emphasis added) *495 The plaintiff argues that the so-called “market exception” to dissenters’ rights does not apply to Provident’s transaction because the shares (memberships) are not exchanged solely for shares (memberships) of the acquiring…”
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