§ 1061. Procedure
Two or more cooperative associations organized under, or which have adopted the provisions
of subchapter 2 of this chapter, or similar laws of other states, whether having or
not having capital stock, may merge or consolidate into one cooperative association
which may be a new cooperative association or one of the constituent cooperatives
by complying with the following requirements:
(1) Notice of the proposed merger or consolidation, to which shall be attached a copy
of the articles therefor in the form prescribed in subdivision (3) of this section,
shall be mailed by each consolidating cooperative to its members, its stockholders
of every class, the holders of its certificates of beneficial interest, and its former
members to whom an allocated reserve is credited on its books, and published in a
newspaper of general circulation in the area served by such consolidating cooperative
not less than 30 days before the date of the meeting at which the consolidating cooperative
acts upon such proposal.
(2) Any present or past member of any consolidating cooperative having a property interest
therein evidenced by its stock or its certificates of beneficial interest, or by an
allocated reserve, may, not later than 10 days before the holding of such meeting,
make a demand in writing upon the consolidating cooperative for payment of such property
interest. If, upon the expiration of 60 days from the time the merger or consolidation
is completed, the consolidating cooperative and all demandants have not agreed upon
the value of the demandants’ interest, such consolidating cooperative shall, within
60 days thereafter, apply by petition to the Superior Court in the county where such
consolidating cooperative is domiciled for the determination of the value in appropriate
securities or cash, as the board of directors of the newly formed cooperative shall
determine, of the interest of each demandant who has made a demand in writing for
payment of his or her property interest, as hereinbefore set forth, and who has not
agreed thereto. Such petition shall state the names and addresses of each and every
person who has made demand within the time specified and in the manner above provided.
The consolidating cooperative shall notify each such demandant by mailing a copy of
the petition and citation by registered mail, return receipt requested, to each demandant
at his or her address as the same appears upon the books of the consolidating cooperative
or to such other address as the court shall direct. Such notice shall be in lieu of
any other notice, statutory or otherwise, and shall be sufficient to bring all parties
so notified and the subject matter of the petition within the jurisdiction of the
court. However, within 30 days from the mailing of such copy of the petition above
referred to, the demandant, at his or her option, instead of proceeding as above set
forth, may have such value ascertained by three disinterested persons, one of whom
shall be named by the demandant, another by the consolidating cooperative, and the
third by the two so named. The findings of these appraisers shall be final, and if
their award is not paid by the consolidating cooperative within 30 days after it is
made and notice given to the consolidating cooperative, the award may be recovered
by the demandant of the consolidating cooperative in a civil action on this statute.
The suit shall be stayed pending the action of the appraisers and shall be terminated
by the presiding judge as to the demandant upon the filing of the findings of the
appraisers with the consolidating cooperative.
(3) If the articles of merger or consolidation are adopted by the affirmative vote of
not less than two-thirds of the members attending and voting of each consolidating
cooperative voting thereon at the meeting called to consider the same, or by not less
than by a two-thirds vote of its delegates if qualified as provided in subdivision
(4) of this section, articles of merger or consolidation in the form adopted shall
be executed under its seal and acknowledged on behalf of each consolidating cooperative
by its president or vice-president. Such articles of merger or consolidation shall
recite that they are executed pursuant to this subchapter and shall state:
(A) the name of each consolidating cooperative and the address of its principal office;
(B) the name of the new cooperative and the address of its principal office in this State,
or if none, the name, email, and address of an agent for service of process pursuant
to section 1655 of this title;
(C) a statement that each consolidating cooperative agrees to the merger or consolidation;
(D) the names and business addresses of the directors of the new cooperative, and of any
other principal the association provides; and
(E) the terms and conditions of the merger or consolidation and the mode of carrying the
same into effect, including the manner in which the members of the consolidating cooperative
may or shall become members of the new cooperative; and may contain provisions, not
inconsistent with law or this subchapter, which are deemed necessary or advisable
for the conduct of the business of the new cooperative.
(4) The president or vice president and the clerk or secretary of each consolidating cooperative
executing such articles of merger or consolidation shall make and annex thereto an
affidavit stating that the provisions of this section in respect to such articles
were duly complied with by such cooperative.
(5) In the case of any consolidating cooperative having a district election of delegates
and a delegate system of voting as permitted by subdivision 995(10) of this title, in which, under its articles of incorporation or bylaws, such delegates have complete
voting power on behalf of the membership for every purpose, except that of their own
election and the election of district directors, the vote adopting the merger or consolidation
required by subdivision (3) of this section shall be that of not less than two- thirds
of the delegates attending and voting at such meeting. (Amended 1965, No. 89, §§ 1, 2, eff. June 10, 1965; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974; 2023, No. 85 (Adj. Sess.), § 15, eff. July 1, 2024; 2025, No. 10, § 3, eff. July 1, 2025.)