§ 12537 Merger Abandonment Authority

The board can decide to stop a merger any time before it becomes official, as long as they respect any contracts that other parties have, and they don’t need a vote from the members.

Key Takeaways

•The board can cancel a merger before it’s official.
•They don’t need member (shareholder) approval to do this.
•They must still respect any existing contracts third parties have.

Example

Company A plans to merge with Company B, but a supplier has a contract that would be hurt by the merger. The board decides to cancel the merger before it’s finalized.

Because the board has the power to abandon the merger before it’s effective, they can stop it without asking the shareholders, but they must still honor the supplier’s contract.

The board may, in its discretion, abandon a merger, subject to the contractual rights, if any, of third parties, including other constituent corporations, without further approval by the members at any time before the merger is effective. (Added by Stats. 1982, Ch. 1625, Sec. 3. Operative January 1, 1984.)

The board can decide to stop a merger any time before it becomes official, as long as they respect any contracts that other parties have, and they don’t need a vote from the members.

Key Takeaways

•The board can cancel a merger before it’s official.
•They don’t need member (shareholder) approval to do this.
•They must still respect any existing contracts third parties have.

Example

Company A plans to merge with Company B, but a supplier has a contract that would be hurt by the merger. The board decides to cancel the merger before it’s finalized.

Because the board has the power to abandon the merger before it’s effective, they can stop it without asking the shareholders, but they must still honor the supplier’s contract.

Key Takeaways

Example

Key Terms

References

§ 12537 Merger Abandonment Authority

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References