The Vermont Statutes Online

Title 11C: Mututal Benefit Enterprises

Chapter 015: Disposition of Assets

• § 1501. Disposition of assets not requiring member approval

  Unless the articles of organization otherwise provide, member approval under section 1502 of this title is not required for a mutual benefit enterprise to:

  (1) sell, lease, exchange, license, or otherwise dispose of all or any part of the assets of the enterprise in the usual and regular course of business; or

  (2) mortgage, pledge, dedicate to the repayment of indebtedness, or encumber in any way all or any part of the assets of the enterprise whether or not in the usual and regular course of business. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)

• § 1502. Member approval of other disposition of assets

  A sale, lease, exchange, license, or other disposition of assets of a mutual benefit enterprise, other than a disposition described in section 1501 of this title, requires approval of the enterprise’s members under sections 1503 and 1504 of this title if the disposition leaves the enterprise without significant continuing business activity. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)

• § 1503. Notice and action on disposition of assets

  For a mutual benefit enterprise to dispose of assets under section 1502 of this title:

  (1) a majority of the board of directors, or a greater percentage if required by the organic rules, shall approve the proposed disposition; and

  (2) the board of directors shall call a members’ meeting to consider the proposed disposition, hold the meeting not later than 90 days after approval of the proposed disposition by the board, and mail or otherwise transmit or deliver in a record to each member:

  (A) the terms of the proposed disposition;

  (B) a recommendation that the members approve the disposition, or if the board determines that because of conflict of interest or other special circumstances it should not make a favorable recommendation, the basis for that determination;

  (C) a statement of any condition of the board’s submission of the proposed disposition to the members; and

  (D) notice of the meeting at which the proposed disposition will be considered, which shall be given in the same manner as notice of a special meeting of members. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)

• § 1504. Disposition of assets

  (a) Subject to subsection (b) of this section, a disposition of assets under section 1502 of this title shall be approved by:

  (1) at least two-thirds of the voting power of members present at a members’ meeting called under subdivision 1503(2) of this title; and

  (2) if the mutual benefit enterprise has investor members, at least a majority of the votes cast by patron members, unless the organic rules require a greater percentage vote by patron members.

  (b) The organic rules may require that the percentage of votes under subdivision (a)(1) of this title is:

  (1) a different percentage that is not less than a majority of members voting at the meeting;

  (2) measured against the voting power of all members; or

  (3) a combination of subdivisions (1) and (2) of this subsection.

  (c) Subject to any contractual obligations, after a disposition of assets is approved and at any time before the consummation of the disposition, a mutual benefit enterprise may approve an amendment to the contract for disposition or the resolution authorizing the disposition or approve abandonment of the disposition:

  (1) as provided in the contract or the resolution; and

  (2) except as prohibited by the resolution, with the same affirmative vote of the board of directors and of the members as was required to approve the disposition.

  (d) The voting requirements for districts, classes, or voting groups under section 404 of this title apply to approval of a disposition of assets under this article. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)