By: Milt Thompson
BleekeDillonCrandall
Indiana LLCs may merge with or into another LLC, with the members’ interests being exchanged for, or converted into, an interest, obligation or other securities of the surviving LLC or into cash or other property. The Indiana Articles of Merger of Limited Liability Companies, State Form 49464 needs to be filed with the Secretary of State.
In order to effect a merger, each constituent entity must enter into a written merger plan that sets forth the name of each entity and the name of the surviving entity, the terms and conditions of the proposed merger, the manner of, and basis for, converting the interests in each entity into interests, shares, or other securities or obligations of the surviving entity, or of any other entity, into cash or other property, and any amendments to articles, operating agreements, certificates of incorporation or limited partnership, or other documents as are to result from the merger (or that no such changes are desired) and other necessary or desired provisions with regard to the merger.
The proposed merger plan must, unless the operating agreement provides otherwise, be approved by unanimous consent of all members. After the merger plan is approved and before articles of merger are filed, the plan may be abandoned (subject to any contractual rights) in accordance with a procedure set forth in the plan or, if none, by majority consent of the members of each LLC involved. If articles of merger have been filed, the Secretary of State must be notified promptly of abandonment. The rights of a person under any other contract made by an LLC that is a party to a merger that is being abandoned are not prejudiced.
After approval of the plan, articles of merger must be filed by the surviving entity. These articles must be signed and must include the name of each constituent entity, the merger plan itself, the effective date of the merger (if later than the date of filing), the name of the surviving entity, and a statement that the plan was duly authorized and approved by each constituent entity in accordance with the statute. A file-stamped copy of the articles may be filed with the county recorder of each county where the LLC has real property at the time of the merger. Articles of merger serve as articles of dissolution for each LLC that does not survive the merger.
When a merger takes effect, every other constituent entity merges into the surviving one and their separate existence ceases. Title to all real estate and other property owned by the constituent entities is vested in the surviving one without reversion or impairment. The surviving entity becomes responsible for all liabilities of the merged entities and proceedings pending against constituents may be continued, with the surviving entity being substituted for them. The articles of the surviving entity are amended to the extent provided in the merger plan. The shares or interests of each constituent convert as provided in the merger plan and the former holders of these interests are entitled only to the rights granted in the articles of merger (except dissenters in the case of shareholders of a corporation that is a merger constituent).
An Indiana LLC is permitted to merge with a foreign LLC, within specified guidelines and restrictions. Such a merger must be permitted by the law of the foreign entity’s state or other jurisdiction as well as the Indiana statutes discussed here. Upon merger, if the surviving entity is to be governed by the law of another jurisdiction, it must agree to be served with process in Indiana, appoint the secretary of state as its agent for service of process purposes, and give an address to which the secretary may mail process.
The Secretary of State is to prepare certificates of merger that specify the name of each party to the merger, the name of the successor and the location of the successor’s registered office in Indiana, and the date the articles of merger were accepted for record.
In 2002, I.C. 23-18-7-9 was added and in 2006, I.C. 23-18-7-10 was added to the Act to allow for domestic and/or foreign entities to, respectively, merge or convert to Indiana LLCs and for Indiana LLCs to, respectively, merge or convert to domestic or foreign entities. Despite this new flexibility throughout the Indiana business laws to allow inter-species combinations and conversions across jurisdictional lines, practitioners would be well advised to alert their clients to the possible tax and other ramifications of such conversions across traditional entity and geographic boundaries.
Thursday, May 26, 2011
Monday, May 23, 2011
"Terrible Things Are Sure To Happen"
By: Chris Simpkins
BleekeDillonCrandall
In one of the largest prison release orders in our nation’s history, the United States Supreme Court recently ordered California to release 38,000 to 46,000 felons who are incarcerated throughout the state. Speaking for the majority, Justice Anthony M. Kennedy, the perennial swing vote on the court, said that California’s prison system has “fallen short of minimum constitutional requirements” due to severe overcrowding. Justice Kennedy pointed to the fact that as many as 54 inmates might have to share a toilet, and as many as 200 prisoners lived in a gymnasium. Additionally, the court noted numerous other concerns related to inadequate medical care and mental health care. According to Justice Kennedy, the overcrowding resulted in “needless suffering and death.” Justice Kennedy, however, did indicate that the state should receive considerable latitude “to find mechanisms and make plans” that are “consistent with the public safety.” Apparently, Justice Kennedy thinks it’s possible to simultaneously protect the public and release tens of thousands of convicted felons back on to the streets. A task that is easier said than done.
Justice Antonin Scalia sharply disagreed with the court’s decision, calling the order “absurd” and “staggering.” He also felt that “terrible things are sure to happen as a consequence of this outrageous order.” Justice Scalia even read part of his dissent from the bench, an unusual procedure from him, and one that indicated just how strongly he felt about the court’s order. If this truly is the largest prison release in our nation’s history, Justice Scalia also felt that it was “perhaps the most radical injunction issued by a court in our nation’s history” as well. Time will tell if Justice Scalia’s look into the future is correct. We hope not, but anytime you release that many prisoner’s back into the public, it is hard not to imagine “terrible things” happening.
BleekeDillonCrandall
In one of the largest prison release orders in our nation’s history, the United States Supreme Court recently ordered California to release 38,000 to 46,000 felons who are incarcerated throughout the state. Speaking for the majority, Justice Anthony M. Kennedy, the perennial swing vote on the court, said that California’s prison system has “fallen short of minimum constitutional requirements” due to severe overcrowding. Justice Kennedy pointed to the fact that as many as 54 inmates might have to share a toilet, and as many as 200 prisoners lived in a gymnasium. Additionally, the court noted numerous other concerns related to inadequate medical care and mental health care. According to Justice Kennedy, the overcrowding resulted in “needless suffering and death.” Justice Kennedy, however, did indicate that the state should receive considerable latitude “to find mechanisms and make plans” that are “consistent with the public safety.” Apparently, Justice Kennedy thinks it’s possible to simultaneously protect the public and release tens of thousands of convicted felons back on to the streets. A task that is easier said than done.
Justice Antonin Scalia sharply disagreed with the court’s decision, calling the order “absurd” and “staggering.” He also felt that “terrible things are sure to happen as a consequence of this outrageous order.” Justice Scalia even read part of his dissent from the bench, an unusual procedure from him, and one that indicated just how strongly he felt about the court’s order. If this truly is the largest prison release in our nation’s history, Justice Scalia also felt that it was “perhaps the most radical injunction issued by a court in our nation’s history” as well. Time will tell if Justice Scalia’s look into the future is correct. We hope not, but anytime you release that many prisoner’s back into the public, it is hard not to imagine “terrible things” happening.
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