HB0021 - Cooperative marketing associations.

2001

State of Wyoming

01LSO‑0039

Substitute No. 1

HOUSE BILL NO. HB0021

Cooperative marketing associations.

Sponsored by: Joint Agriculture, Public Lands and Water
Resources Interim Committee

A BILL

for

1 AN ACT relating to agriculture; providing for processing
2 cooperative marketing associations; providing certain
3 requirements for the organization, administration and
4 operation of cooperative marketing associations as
5 specified; providing definitions; and providing for an
6 effective date.

8 Be It Enacted by the Legislature of the State of Wyoming:

10 Section 1. W.S. 17-10-201 through 17-10-253 are
11 created to read:

13 ARTICLE 2

14 PROCESSING COOPERATIVE

Page 1

1 17-10-201. Title.

3 This act may be cited as the "Wyoming Processing
4 Cooperative law."

6 17-10-202. Definitions.

8 (a) As used in this chapter:

10 (i) "Address" means mailing address, including a
11 zip code. In the case of a registered address, the term
12 means the mailing address and the actual office location,
13 which may not be a post office box;

15 (ii) "Articles" means the articles of
16 organization of a cooperative as originally filed and
17 subsequently amended;

19 (iii) "Association" means an organization
20 conducting business on a cooperative plan under the laws of
21 this state or another state that is chartered to conduct
22 business under other laws of this state or another state;

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1 (iv) "Board" means the board of directors of a
2 cooperative;

4 (v) "Business entity" means a company, limited
5 liability company, limited liability partnership or other
6 legal entity, whether domestic or foreign, association or
7 body vested with the power or function of a legal entity;

9 (vi) "Cooperative" means an association
10 organized under this chapter conducting business on a
11 cooperative plan as provided under this chapter;

13 (vii) "Domestic business entity" means a
14 business entity organized under the laws of this state;

16 (viii) "Filed with the secretary of state" means
17 that a document meeting the applicable requirements of this
18 chapter, signed and accompanied by the required filing fee,
19 has been delivered to the secretary of state of this state.
20 The secretary of state shall endorse on the document the
21 word "Filed" or a similar word determined by the secretary
22 of state and the month, day, and year of filing, record the
23 document in the office of the secretary of state, and

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1 return a document to the person or entity who delivered it
2 for filing;

4 (ix) "Foreign business entity" means a business
5 entity that is not a domestic business entity;

7 (x) "Member" means a person or entity reflected
8 on the books of the cooperative as the owner of governance
9 rights of a membership interest of the cooperative and
10 includes patron and nonpatron members;

12 (xi) "Membership interest" means a member's
13 interest in a cooperative consisting of a member's
14 financial rights, a member's right to assign financial
15 rights, a member's governance rights and a member's right
16 to assign governance rights. Membership interest includes
17 patron membership interests and nonpatron membership
18 interests;

20 (xii) "Members' meeting" means a regular or
21 special members' meeting;

23 (xiii) "Nonpatron membership interest" means a

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1 membership interest that does not require the holder to
2 conduct patronage business for or with the cooperative to
3 receive financial rights or distributions;

5 (xiv) "Patron" means a person or entity who
6 conducts patronage business with the cooperative;

8 (xv) "Patronage" means business, transactions,
9 or services done for or with the cooperative as defined by
10 the cooperative;

12 (xvi) "Patron member" means a member holding a
13 patron membership interest;

15 (xvii) "Patron membership interest" means the
16 membership interest requiring the holder to conduct
17 patronage business for or with the cooperative, as
18 specified by the cooperative to receive financial rights or
19 distributions;

21 (xviii) "Signed" means that the signature of a
22 person has been written on a document, and, with respect to
23 a document required by this chapter to be filed with the

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1 secretary of state, means that the document has been signed
2 by a person authorized to do so by this chapter, the
3 articles or bylaws, or by a resolution approved by the
4 directors or the members. A signature on a document may be
5 a facsimile affixed, engraved, printed, placed, stamped
6 with indelible ink, transmitted by facsimile or
7 electronically or in any other manner reproduced on the
8 document.

10 17-10-203. Filing fee.

12 Unless otherwise provided, the filing fee for documents
13 filed under this chapter with the secretary of state shall
14 be subject to the provisions of W.S. 17-16-122.

16 17-10-204. Registered address.

18 (a) A cooperative shall continuously maintain a
19 registered address in this state. A registered address need
20 not be the same as the principal place of business of the
21 cooperative.

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1 (b) A cooperative may designate a registered agent.
2 The registered agent may be a natural person residing in
3 this state, a domestic business entity or a foreign
4 business entity authorized to transact business in this
5 state. The registered agent shall maintain an office that
6 is identical with the registered office.

8 (c) A cooperative may designate or change its
9 registered address, designate or change its registered
10 agent or state a change in the name of its registered
11 agent, by filing a statement with the secretary of state
12 containing:

14 (i) The name of the cooperative;

16 (ii) The new address of the cooperative's
17 registered office;

19 (iii) The name of the cooperative's registered
20 agent, if any;

22 (iv) A statement that the address of its
23 registered agent, as changed, will be identical; and

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2 (v) A statement that the change of registered
3 address or registered agent was authorized by a resolution
4 approved by the affirmative vote of a majority of the
5 board.

7 (d) A registered agent of a cooperative may resign by
8 filing with the secretary of state a signed written notice
9 of resignation, including a statement that a signed copy of
10 the notice has been given to the cooperative at its
11 principal place of business or to a legal representative of
12 the cooperative. The appointment of the agent shall
13 terminate thirty (30) days after the notice is filed with
14 the secretary of state.

16 (e) If the address or name of a registered agent
17 changes, the agent shall change the address or the name of
18 the registered agent of the cooperative represented by the
19 agent by filing with the secretary of state the statement
20 required in subsection (c) of this section, except that the
21 statement need only be signed by the registered agent, need
22 not be responsive to paragraph (c)(iv) of this section, but
23 shall state that a copy of the statement has been mailed to

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1 the cooperative or to the legal representative of the
2 cooperative.

4 17-10-205. Organizational purpose.

6 A cooperative may be formed and organized on a cooperative
7 plan as provided under this chapter to market, process, or
8 otherwise change the form or marketability of crops,
9 livestock and other agricultural products, including
10 manufacturing and further processing of those products and
11 other purposes that are necessary or convenient to
12 facilitate the production or marketing of agricultural
13 products by patron members and other purposes that are
14 related to the business of the cooperative.

16 17-10-206. Organizers.

18 A cooperative may be organized by one (1) or more
19 organizers who shall be adult natural persons, who may act
20 for themselves as individuals or as the agents of other
21 entities.

23 17-10-207. Cooperative name.

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2 (a) The name of a cooperative shall distinguish the
3 cooperative upon the records in the office of the secretary
4 of state from the name of a domestic business entity or a
5 foreign business entity, authorized or registered to do
6 business in this state or a name the right to which is, at
7 the time of organization, reserved or provided for by law.

9 (b) The cooperative name shall be reserved for the
10 cooperative during its existence.

12 17-10-208. Articles of organization.

14 (a) The organizers shall prepare the articles, which
15 shall include:

17 (i) The name of the cooperative;

19 (ii) The purpose of the cooperative;

21 (iii) The principal place of business for the
22 cooperative;

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1 (iv) The period of duration for the cooperative,
2 if the duration is not to be perpetual;

4 (v) The capital structure of the cooperative
5 including a statement of the classes and relative rights,
6 preferences, and restrictions granted to or imposed upon
7 each class of member interests, the rights to share in
8 profits or distributions of the cooperative, and the
9 authority to issue member interests, which may be
10 designated to be determined by the board;

12 (vi) A provision designating the governance
13 rights, including which membership interests have voting
14 power and any limitations or restrictions on the voting
15 power, which shall be in accordance with the provisions of
16 this chapter;

18 (vii) A statement that patron membership
19 interests with voting power shall be restricted to one (1)
20 vote for each member regardless of the amount of patron
21 membership interests held in the affairs of the cooperative
22 or a statement describing the allocation of voting power
23 allocated as prescribed in this chapter;

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2 (viii) A statement that membership interests
3 held by a member are transferable only with the approval of
4 the board or as provided in the bylaws;

6 (ix) The names, post office addresses, and terms
7 of office of the directors of the first board;

9 (x) A statement as to how profits and losses
10 will be allocated and cash will be distributed between
11 patron membership interests collectively and nonpatron
12 membership interests collectively, a statement that net
13 income allocated to a patron membership interests as
14 determined by the board in excess of dividends and
15 additions to reserves shall be distributed on the basis of
16 patronage, and that the records of the cooperative shall
17 include the interests of patron membership interests and
18 nonpatron membership interests which may be further
19 described in the bylaws, of any classes, and in the
20 reserves; and

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1 (xi) The registered address of the cooperative
2 and the name of the registered agent, if any, at that
3 address.

5 (b) The articles shall contain the provisions in
6 subsection (a) of this section, except that the names, post
7 office addresses of the directors of the first board may be
8 omitted after their successors have been elected by the
9 members or the articles are amended in their entirety.

11 (c) The articles may contain any other lawful
12 provision.

14 (d) The articles shall be signed by the organizers.

16 (e) The original articles shall be filed with the
17 secretary of state. The fee for filing the articles with
18 the secretary of state shall be subject to the provisions
19 of W.S. 17-16-122.

21 (f) When the articles of organization have been filed
22 with the secretary of state and the required fee has been
23 paid to the secretary of state, it shall be presumed that:

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2 (i) All conditions precedent that are required
3 to be performed by the organizers have been complied with;

5 (ii) The organization of the cooperative has
6 been chartered by the state as a separate legal entity; and

8 (iii) The secretary of state shall issue a
9 certificate of organization to the cooperative.

11 17-10-209. Amendment of articles.

13 (a) The articles of a cooperative shall be amended as
14 follows:

16 (i) The board by majority vote shall pass a
17 resolution stating the text of the proposed amendment. The
18 text of the proposed amendment and an attached mail ballot,
19 if the board has provided for a mail ballot in the
20 resolution or alternative method approved by the board and
21 stated in the resolution, shall be mailed or distributed
22 with a regular or special meeting notice to each member.
23 The notice shall designate the time and place of the

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1 meeting for the proposed amendment to be considered and
2 voted on;

4 (ii) If a quorum of the members is registered as
5 being present or represented by alternative vote at the
6 meeting, the proposed amendment is adopted:

8 (A) If approved by a majority of the votes
9 cast; or

11 (B) For a cooperative with articles or
12 bylaws requiring more than majority approval or other
13 conditions for approval, the amendment is approved by a
14 proportion of the votes cast or a number of total members
15 as required by the articles or bylaws and the conditions
16 for approval in the articles or bylaws have been satisfied.

18 (b) After an amendment has been adopted by the
19 members, the amendment shall be signed by the chair,
20 vice-chair, records officer, or assistant records officer
21 and a copy of the amendment filed in the office of the
22 secretary of state.

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1 (c) A certificate shall be prepared stating:

3 (i) The vote and meeting of the board adopting a
4 resolution of the proposed amendment;

6 (ii) The notice given to members of the meeting
7 at which the amendment was adopted;

9 (iii) The quorum registered at the meeting; and

11 (iv) The vote cast adopting the amendment.

13 (d) The certificate shall be signed by the chair,
14 vice-chair, records officer or financial officer and filed
15 with the records of the cooperative.

17 (e) A majority of directors may amend the articles if
18 the cooperative does not have any members with voting
19 rights.

21 17-10-210. Amendment of organizational documents to
22 be governed by this chapter.

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1 (a) A business entity organized and doing business
2 under other statutes of this state or under the laws of
3 other states that has or will conduct business as a
4 cooperative may become subject to this chapter by amending
5 its organizational documents to conform to the requirements
6 of articles of organization under this chapter.

8 (b) A business entity organized under other statutes
9 of this state may amend its articles in the manner provided
10 under the statute that it is governed by for the adoption
11 of amendments to comply with the provisions of this chapter
12 and file the amended articles with the secretary of state
13 to be a cooperative governed under this chapter. The status
14 of the business entity under the other statutes terminates
15 with the filing of articles to be governed under this
16 chapter.

18 (c) A business entity organized under laws of other
19 states shall amend its organizational documents in the
20 manner required by the laws of the state where it was
21 organized to comply with the provisions of this chapter,
22 including a statement that the business entity will
23 terminate its status of organization under the laws of the

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1 other state. After the organizational documents are
2 amended, the business entity shall file a certified copy of
3 the organizational documents as amended with the secretary
4 of state to comply with the provisions of this chapter with
5 the fees and requirements prescribed for filing articles.
6 After filing, the business entity is a cooperative in this
7 state organized under and subject to the provisions of this
8 chapter. The cooperative shall complete the process of
9 termination or dissolution of the business entity as
10 organized in the other state.

12 17-10-211. Existence.

14 (a) The existence of a cooperative shall begin when
15 the articles are filed with the secretary of state.

17 (b) A cooperative shall have a perpetual duration
18 unless the cooperative provides for a limited period of
19 duration in the articles of organization.

21 17-10-212. Bylaws.

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1 (a) A cooperative shall have bylaws governing the
2 cooperative's business affairs, structure, the
3 qualifications, classification, rights and obligations of
4 members, and the classifications, allocations and
5 distributions of membership interests.

7 (b) The bylaws of a cooperative may be adopted or
8 amended by the directors as provided in subsection (c) of
9 this section, or at a regular or special members' meeting
10 if:

12 (i) The notice of the meeting contains a
13 statement that the bylaws or restated bylaws will be voted
14 upon and copies are included with the notice, or copies are
15 available upon request from the cooperative and summary
16 statement of the proposed bylaws or amendment is included
17 with the notice;

19 (ii) A quorum is registered as being present or
20 represented by mail or alternative voting method if the
21 mail or alternative voting method is authorized by the
22 board; and

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1 (iii) The bylaws or amendment is approved by a
2 majority vote cast, or for a cooperative with articles or
3 bylaws requiring more than majority approval or other
4 conditions for approval, the bylaws or amendment is
5 approved by a proportion of the vote cast or a number of
6 the total members as required by the articles or bylaws and
7 the conditions for approval in the articles or bylaws have
8 been satisfied.

10 (c) Until the next annual or special members'
11 meeting, the majority of directors may adopt and amend
12 bylaws for the cooperative that are consistent with
13 subsection (d) of this section which may be further amended
14 or repealed by the members at an annual or special members'
15 meeting.

17 (d) Bylaws may contain any provision relating to the
18 management or regulation of the affairs of the cooperative
19 that are not inconsistent with law or the articles, and
20 shall include the following:

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1 (i) The number of directors, and the
2 qualifications, manner of election, powers, duties, and
3 compensation, if any, of directors;

5 (ii) The qualifications of members and any
6 limitations on their number;

8 (iii) The manner of admission, withdrawal,
9 suspensions, and expulsion of members;

11 (iv) Generally the governance rights, financial
12 rights, assignability of governance and financial rights,
13 and other rights, privileges and obligations of members and
14 their membership interests, which may be further described
15 in member control agreements.

17 17-10-213. Powers.

19 (a) In addition to other powers, a cooperative as an
20 agent or otherwise:

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1 (i) May perform every act and thing necessary or
2 proper to the conduct of the cooperative's business or the
3 accomplishment of the purposes of the cooperative;

5 (ii) Has other rights, powers, or privileges
6 granted by the laws of this state to other cooperatives,
7 except those that are inconsistent with the express
8 provisions of this chapter; and

10 (iii) Has the powers given in this section.

12 (b) A cooperative may buy, sell, or deal in its own
13 products, the products of the cooperative's individual
14 members, patrons or nonmembers, the products of another
15 cooperative association, or of its members or patrons, or
16 the products of another person or entity. A cooperative may
17 negotiate the price at which the products the cooperative
18 is selling may be sold.

20 (c) A cooperative may enter into or become a party to
21 a contract or agreement for the cooperative or for the
22 cooperative's individual members or patrons or between the
23 cooperative and its members.

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2 (d) A cooperative may purchase and hold, lease,
3 mortgage, encumber, sell, exchange and convey as a legal
4 entity real estate, buildings and personal property as the
5 business of the cooperative may require including the sale
6 or other disposition of assets required by the business of
7 the cooperative as determined by the board.

9 (e) A cooperative may erect buildings or other
10 structures or facilities on the cooperative's owned or
11 leased property or on a right-of-way legally acquired by
12 the cooperative.

14 (f) A cooperative may issue bonds or other evidence
15 of indebtedness and may borrow money to finance the
16 business of the cooperative.

18 (g) A cooperative may make advances to the
19 cooperative's members or patrons on products delivered by
20 the members or patrons to the cooperative.

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1 (h) A cooperative may accept deposits of money from
2 other cooperatives, associations or members from which it
3 is constituted.

5 (j) A cooperative may loan or borrow money to or from
6 individual members, cooperatives or associations from which
7 it is constituted with security that it considers
8 sufficient in dealing with the members, cooperatives, or
9 associations.

11 (k) A cooperative may purchase, acquire, hold, or
12 dispose of the ownership interests of another business
13 entity whether organized under the laws of this state or
14 another state and assume all rights, interests, privileges,
15 responsibilities and obligations arising out of the
16 ownership interests.

18 (m) A cooperative may acquire and hold ownership
19 interests in another business entity organized under the
20 laws of this state or another state of the United States,
21 including a business entity organized:

23 (i) As a federation of associations;

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2 (ii) For the purpose of forming a district,
3 state, or national marketing, sales or service agency; or

5 (iii) For the purpose of acquiring marketing
6 facilities at terminal or other markets in this state or
7 other states.

9 (n) A cooperative may purchase, own, and hold
10 ownership interests, memberships, interests in nonstock
11 capital, evidences of indebtedness of any domestic business
12 entity or foreign business entity when reasonably necessary
13 or incidental to accomplish the purposes stated in the
14 articles.

16 (o) A cooperative may exercise any and all fiduciary
17 powers in relations with members, cooperatives,
18 associations or business entities from which it is
19 constituted.

21 (p) A cooperative may take, receive, and hold real
22 and personal property, including the principal and interest
23 of money or other funds and rights in a contract, in trust

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1 for any purpose not inconsistent with the purposes of the
2 cooperative in its articles and may exercise fiduciary
3 powers in relation to taking, receiving, and holding the
4 real and personal property.

6 17-10-214. Agricultural product marketing contracts.

8 (a) A cooperative and its patron member or patron may
9 make and execute a marketing contract, requiring the patron
10 member or patron to sell a specified portion of his
11 agricultural product or specified commodity produced from a
12 certain area exclusively to or through the cooperative or
13 facility established by the cooperative.

15 (b) If a sale is contracted to the cooperative, the
16 sale shall transfer title to the product absolutely, except
17 for a recorded lien or security interest, to the
18 cooperative on delivery of the product or at another
19 specified time if expressly provided in the contract. The
20 contract may allow the cooperative to sell or resell the
21 product of its patron member or patron with or without
22 taking title to the product, and pay the resale price to
23 the patron member or patron, after deducting all necessary

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1 selling, overhead and other costs and expenses, including
2 other proper reserves and interest.

4 (c) A single term of a marketing contract shall not
5 exceed ten (10) years, but a marketing contract may be made
6 self-renewing for periods not exceeding five (5) years
7 each, subject to the right of either party to terminate by
8 giving written notice of the termination during a period of
9 the current term as specified in the contract.

11 (d) The bylaws or the marketing contract, or both,
12 may set a specific sum as liquidated damages to be paid by
13 the patron member or patron to the cooperative for breach
14 of any provision of the marketing contract regarding the
15 sale or delivery or withholding of a product and may
16 provide that the member or patron shall pay the costs,
17 premiums for bonds, expenses and fees if an action is
18 brought on the contract by the cooperative. The remedies
19 for breach of contract are valid and enforceable in the
20 courts of this state. The provisions shall be enforced as
21 liquidated damages and are not to be considered or regarded
22 as a penalty.

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1 (e) If there is a breach or threatened breach of a
2 marketing contract by a patron member or patron, the
3 cooperative is entitled to an injunction to prevent the
4 further breach of the contract and to a decree of specific
5 performance of the contract. Pending the adjudication of
6 the action after filing a certified complaint showing the
7 breach or threatened breach and filing a sufficient bond,
8 the cooperative is entitled to a temporary restraining
9 order and preliminary injunction against the patron member
10 or patron.

12 (f) A person, corporation or other entity is guilty
13 of a misdemeanor punishable by a fine of not to exceed one
14 thousand dollars ($1,000.00) if the person or the
15 corporation's or entity's officers or employees:

17 (i) Knowingly induce or attempt to induce a
18 member or patron of a cooperative to break a marketing
19 contract with the cooperative; or

21 (ii) Maliciously and knowingly spread false
22 reports about the finances or management or activity of a
23 cooperative.

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2 (g) In addition to the penalty provided in subsection
3 (f) of this section, the person, corporation or other
4 entity may be liable to the cooperative for treble damages
5 for any violation of the provisions of subsection (f) of
6 this section. Each violation shall constitute a separate
7 offense and is subject to the penalties in this subsection
8 and subsection (f) of this section.

10 17-10-215. Board governs cooperative.

12 A cooperative shall be governed by its board.

14 17-10-216. Number of directors.

16 The board shall have not less than three (3) directors.

18 17-10-217. Election of directors.

20 (a) Directors shall be elected for the term, at the
21 time, and in the manner provided in this section and the
22 bylaws. A majority of the directors shall be members and at
23 least one (1) director shall be elected exclusively by the

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1 members holding patron membership interests. The voting
2 authority of the directors may be allocated according to
3 allocation units or equity classifications of the
4 cooperative provided that at least one-half (1/2) of the
5 voting power on general matters of the cooperative shall be
6 allocated to one (1) or more directors elected by members
7 holding patron membership interests or in the alternative
8 the one (1) or more directors elected by the members
9 holding patron membership interests shall have an equal or
10 shall not have a minority voting power on general matters
11 of the cooperative.

13 (b) Directors shall be elected at the regular
14 members' meeting for the terms of office prescribed in the
15 bylaws. Except for directors elected at district meetings,
16 all directors shall be elected at the regular members'
17 meeting.

19 (c) For a cooperative with districts or other units,
20 members may elect directors on a district or unit basis if
21 provided in the bylaws. The directors may be nominated or
22 elected at district meetings if provided in the bylaws.
23 Directors who are nominated at district meetings shall be

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1 elected at the annual regular members' meeting by vote of
2 the entire membership, unless the bylaws provide that
3 directors who are nominated at district meetings are to be
4 elected by vote of the members of the district at the
5 annual regular members' meeting.

7 (d) The following shall apply to alternative voting:

9 (i) A member may not vote other than by their
10 presence at a meeting for a director unless alternative
11 voting is authorized for election of directors by the
12 articles or bylaws;

14 (ii) The ballot shall be in a form prescribed by
15 the board;

17 (iii) The member shall mark the ballot for the
18 candidate chosen and mail the ballot to the cooperative in
19 a sealed plain envelope inside another envelope bearing the
20 member's name, or shall vote in the alternative manner
21 prescribed by the board;

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1 (iv) If the ballot of the member is received by
2 the cooperative on or before the date of the regular
3 members' meeting, the ballot shall be accepted and counted
4 as the vote of the absent member.

6 (e) If a member of a cooperative is not a natural
7 person, and the bylaws do not provide otherwise, the member
8 may appoint or elect one (1) or more natural persons to be
9 eligible for election as a director to the board.

11 17-10-218. Filling vacancies.

13 If a patron member director's position becomes vacant for a
14 director that was elected by patron members, the board
15 shall appoint a patron member of the cooperative to fill
16 the director's position until the next regular or special
17 members' meeting. If the vacating director was not a patron
18 member, the board shall appoint a patron member to fill the
19 vacant position. At the next regular or special members'
20 meeting, the members or patron members shall elect a
21 director to fill the unexpired term of the vacant
22 director's position.

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1 17-10-219. Removal of directors.

3 The members electing a director may remove the director at
4 a members' meeting for cause related to the duties of the
5 position of director and fill the vacancy caused by the
6 removal.

8 17-10-220. Limitation of director's liability.

10 (a) A director's personal liability to the
11 cooperative or members for monetary damages for breach of
12 fiduciary duty as a director may be eliminated or limited
13 in the articles except as provided in subsection (b) of
14 this section.

16 (b) The articles may not eliminate or limit the
17 liability of a director:

19 (i) For a breach of the director's duty of
20 loyalty to the cooperative or its members;

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1 (ii) For acts or omissions that are not in good
2 faith or involve intentional misconduct or a knowing
3 violation of law;

5 (iii) For a transaction from which the director
6 derived an improper personal benefit; or

8 (iv) For an act or omission occurring before the
9 date when the provision in the articles eliminating or
10 limiting liability becomes effective.

12 17-10-221. Officers.

14 (a) The board shall elect:

16 (i) A chair; and

18 (ii) One (1) or more vice-chairs.

20 (b) The board shall elect or appoint:

22 (i) A records officer; and

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1 (ii) A financial officer.

3 (c) The board may elect additional officers as the
4 articles or bylaws authorize or require.

6 (d) The offices of records officer and financial
7 officer may be combined.

9 (e) The chair and first vice-chair shall be directors
10 and members. The financial officer, records officer, and
11 additional officers need not be directors or members.

13 (f) The board may employ a chief executive officer to
14 manage the day-to-day affairs and business of the
15 cooperative.

17 (g) Other than the chief executive officer, members
18 may remove an officer at a members' meeting for cause
19 related to the duties of the position of the officer and
20 fill the vacancy caused by the removal.

22 17-10-222. Membership interests.

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1 (a) The authorized amount and divisions of patron
2 membership interests and nonpatron membership interests may
3 be increased or decreased or established or altered, in
4 accordance with the restrictions in this chapter by
5 amending the articles at a regular members' meeting or at a
6 special members' meeting called for the purpose of the
7 amendment.

9 (b) Authorized membership interests may be issued on
10 terms and conditions prescribed in the articles, bylaws, or
11 as determined by the board. The cooperative shall disclose
12 to any person or entity acquiring membership interests to
13 be issued by the cooperative, the organization, capital
14 structure and business prospects and risks of the
15 cooperative, the nature of the governance and financial
16 rights of the membership interest being acquired and of
17 other classes of membership and membership interests. The
18 cooperative shall notify all members of the membership
19 interests being offered by the cooperative. A membership
20 interest may not be issued until the subscription price of
21 the membership interest has been paid for in cash or a cash
22 equivalent or property with the agreed upon value of the
23 property to be contributed.

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2 (c) The patron membership interests collectively
3 shall have not less than fifteen percent (15%) of the
4 cooperative's financial rights to profit allocations and
5 distributions.

7 (d) After issuance by the cooperative, membership
8 interests in a cooperative may only be sold or transferred
9 with the approval of the board.

11 (e) The cooperative may solicit and issue nonpatron
12 membership interests on terms and conditions determined by
13 the board and disclosed in the articles, bylaws or by
14 separate disclosure to the members. Each member acquiring
15 nonpatron membership interests shall sign a member control
16 agreement which shall describe the rights and obligations
17 of the member as it relates to the nonpatron membership
18 interests, the financial and governance rights, the
19 transferability of the nonpatron membership interests, the
20 division and allocations of profits and losses among the
21 membership interests and membership classes, and financial
22 rights upon liquidation. If the bylaws do not otherwise
23 provide for the allocation of the profits and losses

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1 between patron membership interests and nonpatron
2 membership interests, then the allocation of profits and
3 losses among nonpatron membership interests individually
4 and patron membership interests collectively shall be
5 allocated on the basis of the value of contributions to
6 capital made according to the patron membership interests
7 collectively and the nonpatron membership interests
8 individually to the extent the contributions have been
9 accepted by the cooperative. Distributions of cash or other
10 assets of the cooperative shall be allocated among the
11 membership interests as provided in the articles and
12 bylaws, subject to the provisions of this chapter. If not
13 otherwise provided, distributions shall be made on the
14 basis of value of the capital contributions of the patron
15 membership interests collectively and the nonpatron
16 membership interests to the extent the contributions have
17 been accepted by the cooperative.

19 (f) The bylaws may provide that the cooperative or
20 the patron members, individually or collectively, have the
21 first privilege of purchasing the membership interests of
22 any class of patron member's membership interests offered
23 for sale. The first privilege to purchase patron membership

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1 interests may be satisfied by notice to other patron
2 members that the patron membership interests are for sale
3 and a procedure by which patron members may proceed to
4 attempt to purchase and acquire the patron membership
5 interests. A patron membership interest acquired by the
6 cooperative may be held to be reissued or may be retired
7 and cancelled.

9 (g) Subject to the provisions in the bylaws, a member
10 may dissent from and obtain payment for the fair value of
11 the member's nonpatron membership interests in the
12 cooperative if the articles or bylaws are amended in a
13 manner that materially and adversely affects the rights and
14 preferences of the nonpatron membership interests of the
15 dissenting member. The dissenting member shall file a
16 notice of intent to demand fair value of the membership
17 interest with the records officer of the cooperative within
18 thirty (30) days after the amendment of the bylaws and
19 notice of the amendment to members, otherwise the right of
20 the dissenting member to demand payment of fair value for
21 the membership interest is deemed to be waived. If a
22 proposed amendment of the articles or bylaws shall be
23 approved by the members, a member who is entitled to

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1 dissent and who wishes to exercise dissenter's rights shall
2 file a notice to demand fair value of the membership
3 interest with the records officer of the cooperative before
4 the vote on the proposed action and shall not vote in favor
5 of the proposed action, otherwise the right to demand fair
6 value for the membership interest by the dissenting member
7 is deemed waived. After receipt of the dissenting member's
8 demand notice and approval of the amendment, the
9 cooperative has sixty (60) days to rescind the amendment or
10 otherwise the cooperative shall remit the fair value for
11 the one (1) member's interest to the dissenting member by
12 one hundred eighty (180) days after receipt of the notice.
13 Upon receipt of the fair value for the membership interest,
14 the member has no further member rights in the cooperative.

16 17-10-223. Grouping of members.

18 (a) A cooperative may group members and patron
19 members in districts, units or another basis if and as
20 authorized in its articles and bylaws which may include
21 authorization for the board to determine the groupings.

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1 (b) The board may do things necessary to implement
2 the use of districts or units including setting the time
3 and place and prescribing the rules of conduct for holding
4 meetings by districts or units to elect delegates to
5 members' meetings.

7 17-10-224. Member violations; liability for
8 cooperative debts.

10 (a) A member who knowingly, intentionally, or
11 repeatedly violates a provision of the articles, bylaws,
12 member control agreement or marketing contract with the
13 cooperative, may be required by the board to surrender the
14 financial rights of membership interest of any class owned
15 by the member.

17 (b) The cooperative shall refund to the member for
18 the surrendered financial rights of membership interest the
19 lesser of the book value or market value of the financial
20 right of the membership interest payable in not more than
21 seven (7) years from the date of surrender or the board may
22 transfer all of any patron member's financial rights to a
23 class of financial rights held by members who are not

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1 patron members, or to a certificate of interest which
2 carries liquidation rights on par with membership interests
3 and is redeemed within seven (7) years after the transfer
4 as provided in the certificate.

6 (c) Membership interests required to be surrendered
7 may be reissued or be retired and cancelled by the board.

9 (d) A member who knowingly, intentionally or
10 repeatedly violates a provision of the articles, bylaws,
11 member control agreement, or a marketing contract, may be
12 required by the board to surrender voting power in the
13 cooperative.

15 (e) A member is not, merely on the account of that
16 status, personally liable for the acts, debts, liabilities,
17 or obligations of a cooperative. A member is liable for any
18 unpaid subscription for the membership interest, unpaid
19 membership fees, or a debt for which the member has
20 separately contracted with the cooperative.

22 17-10-225. Regular members' meetings.

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1 (a) Regular members' meetings shall be held annually
2 at a time determined by the board, unless otherwise
3 provided for in the bylaws.

5 (b) The regular members' meeting shall be held at the
6 principal place of business of the cooperative or at
7 another conveniently located place as determined by the
8 bylaws or the board.

10 (c) The officers shall submit reports to the members
11 at the regular members' meeting covering the business of
12 the cooperative for the previous fiscal year that show the
13 condition of the cooperative at the close of the fiscal
14 year.

16 (d) All directors shall be elected at the regular
17 members' meeting for the terms of office prescribed in the
18 bylaws, except for directors elected at district or unit
19 meetings.

21 (e) The cooperative shall give notice of regular
22 members' meetings by mailing the regular members' meeting
23 notice to each member at the member's last known post

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1 office address or by other notification approved by the
2 board and agreed to by the members. The regular members'
3 meeting notice shall be published or otherwise given by
4 approved method at least two (2) weeks before the date of
5 the meeting or mailed at least fifteen (15) days before the
6 date of the meeting.

8 17-10-226. Special members' meetings.

10 (a) Special members' meetings of the members may be
11 called by:

13 (i) A majority vote of the board; or

15 (ii) The written petition of at least twenty
16 percent (20%) of the patron members, twenty percent (20%)
17 of the nonpatron members or twenty percent (20%) of all
18 members collectively are submitted to the chair.

20 (b) The cooperative shall give notice of a special
21 members' meeting by mailing the special members' meeting
22 notice to each member personally at the person's last known
23 post office address or an alternative method approved by

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1 the board and the member individually or the members
2 generally. For a member that is an entity, notice mailed or
3 delivered by an alternative method shall be to an officer
4 of the entity. The special members' meeting notice shall
5 state the time, place, and purpose of the special members'
6 meeting. The special members' meeting notice shall be
7 issued within ten (10) days from and after the date of the
8 presentation of a members' petition, and the special
9 members' meeting shall be held within thirty (30) days
10 after the date of the presentation of the members'
11 petition.

13 17-10-227. Certification of meeting notice.

15 (a) After mailing special or regular members' meeting
16 notices or otherwise delivering the notices, the
17 cooperative shall execute a certificate containing the date
18 of mailing or delivery of the notice and a statement that
19 the special or regular members' meeting notices were mailed
20 or delivered as prescribed by law.

22 (b) The certificate shall be made a part of the
23 record of the meeting.

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2 17-10-228. Failure to receive meeting notice.

4 Failure of a member to receive a special or regular
5 members' meeting notice does not invalidate an action that
6 is taken by the members at a members' meeting.

8 17-10-229. Quorum.

10 (a) The quorum for a members' meeting to transact
11 business shall be:

13 (i) Ten percent (10%) of the total number of
14 members for a cooperative with five hundred (500) or less
15 members; or

17 (ii) Fifty (50) members for cooperatives with
18 more than five hundred (500) members.

20 (b) In determining a quorum at a meeting, on a
21 question submitted to a vote by mail or an alternative
22 method, members present in person or represented by mail
23 vote or the alternative voting method shall be counted. The

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1 attendance of a sufficient number of members to constitute
2 a quorum shall be established by a registration of the
3 members of the cooperative present at the meeting. The
4 registration shall be verified by the chair or the records
5 officer of the cooperative and shall be reported in the
6 minutes of the meeting.

8 (c) An action by a cooperative is not valid or legal
9 in the absence of a quorum at the meeting at which the
10 action was taken.

12 17-10-230. Member voting rights.

14 (a) A patron member of a cooperative is only entitled
15 to one (1) vote on an issue to be voted upon by members
16 holding patron membership interests, except that a patron
17 member of a cooperative described in W.S. 17-10-231 may be
18 entitled to more than one (1) vote as provided in that
19 section. On any matter of the cooperative, the entire
20 patron members voting power shall be voted collectively
21 based upon the vote of the majority of patron members
22 voting on the issue. A nonpatron member has the voting
23 rights in accordance to his nonpatron membership interests

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1 as granted in the bylaws, subject to the provisions of this
2 chapter.

4 (b) A member or delegate may exercise voting rights
5 on any matter that is before the members as prescribed in
6 the articles or bylaws at a members' meeting from the time
7 the member or delegate arrives at the members' meeting,
8 unless the articles or bylaws specify an earlier and
9 specific time for closing the right to vote.

11 (c) A member's vote at a members' meeting shall be in
12 person or by mail if a mail vote is authorized by the board
13 or by alternative method if authorized by the board, and
14 not by proxy except as provided in subsection (d) of this
15 section.

17 (d) The following shall apply to members represented
18 by delegates:

20 (i) A cooperative may provide in the articles or
21 bylaws that units or districts of members are entitled to
22 be represented at members' meetings by delegates chosen by
23 the members of the unit or district. The delegates may vote

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1 on matters at the members' meeting in the same manner as a
2 member. The delegates may only exercise the voting rights
3 on a basis and with the number of votes as prescribed in
4 the articles or bylaws;

6 (ii) If the approval of a certain portion of the
7 members is required for adoption of amendments, a
8 dissolution, a merger, a consolidation, or a sale of
9 assets, the votes of delegates shall be counted as votes by
10 the members represented by the delegate;

12 (iii) Patron members may be represented by the
13 proxy of other patron members;

15 (iv) Nonpatron members may be represented by
16 proxy if authorized in the bylaws.

18 (e) The following shall apply to absentee ballots:

20 (i) A member who is or will be absent from a
21 members' meeting may vote by mail or by an approved
22 alternative method on the ballot prescribed in this
23 subsection on any motion, resolution or amendment that the

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1 board submits for vote by mail or alternative method to the
2 members;

4 (ii) The ballot shall be in the form prescribed
5 by the board and contain:

7 (A) The exact text of the proposed motion,
8 resolution or amendment to be acted on at the meeting; and

10 (B) The text of the motion, resolution or
11 amendment for which the member may indicate an affirmative
12 or negative vote.

14 (iii) The member shall express a choice by
15 marking an appropriate choice on the ballot and mail,
16 deliver or otherwise submit the ballot to the cooperative
17 in a plain, sealed envelope inside another envelope bearing
18 the member's name or by an alternative method approved by
19 the board;

21 (iv) A properly executed ballot shall be
22 accepted by the board and counted as the vote of the absent
23 member at the meeting.

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2 17-10-231. Patron member voting in cooperatives
3 constituted entirely or partially of other cooperatives or
4 associations.

6 (a) A cooperative that is constituted entirely or
7 partially of other cooperatives or associations may
8 authorize by the articles or the bylaws for affiliated
9 cooperative patron members to have an additional vote for:

11 (i) A stipulated amount of business transacted
12 between the patron member cooperative and the central
13 cooperative organization;

15 (ii) A stipulated number of patron members in
16 the member cooperative;

18 (iii) A certain stipulated amount of equity
19 allocated to or held by the patron member cooperative in
20 the cooperative central organization; or

22 (iv) A combination of methods in paragraphs (i)
23 through (iii) of this subsection.

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2 (b) A cooperative that is organized into units or
3 districts of patron members, may, by the articles or the
4 bylaws, authorize the delegates elected by its patron
5 members or, have an additional vote for:

7 (i) A stipulated amount of business transacted
8 between the patron members in the units or districts and
9 the cooperative;

11 (ii) A certain stipulated amount of equity
12 allocated to or held by the patron members of the units or
13 districts of the cooperative; or

15 (iii) A combination of methods in paragraphs (i)
16 and (ii) of this subsection.

18 17-10-232. Vote of ownership interests held by
19 cooperative.

21 A cooperative that holds ownership interests of another
22 business entity may, by direction of the cooperative's
23 board, elect or appoint a person to represent the

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1 cooperative at a meeting of the business entity. The
2 representative has authority to represent the cooperative
3 and may cast the cooperative's vote at the business
4 entity's meeting.

6 17-10-233. Allocations and distributions to members.

8 (a) The bylaws shall prescribe the allocation of
9 profits and losses between patron membership interests
10 collectively and other membership interests. If the bylaws
11 do not otherwise provide, the profits and losses between
12 patron membership interests collectively and other
13 membership interests shall be allocated on the basis of the
14 value of contributions to capital made by the patron
15 membership interests collectively and other membership
16 interests and accepted by the cooperative. The allocation
17 of profits to the patron membership interests collectively
18 shall not be less than fifteen percent (15%) of the total
19 profits in any fiscal year.

21 (b) The bylaws shall prescribe the distribution of
22 cash or other assets of the cooperative among the
23 membership interests of the cooperative. If not otherwise

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1 provided in the bylaws, distribution shall be made to the
2 patron membership interests collectively and other members
3 on the basis of the value of contributions to capital made
4 and accepted by the cooperative by the patron membership
5 interests collectively and other membership interests. The
6 distributions to patron membership interests collectively
7 shall not be less than fifteen percent (15%) of the total
8 distributions in any fiscal year.

10 17-10-234. Allocations and distributions to patron
11 members.

13 (a) A cooperative may set aside a portion of net
14 income allocated to the patron membership interests as the
15 board determines advisable to create or maintain a capital
16 reserve.

18 (b) In addition to a capital reserve, the board may,
19 for patron membership interests:

21 (i) Set aside an amount not to exceed five
22 percent (5%) of the annual net income of the cooperative
23 for promoting and encouraging cooperative organization; and

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2 (ii) Establish and accumulate reserves for new
3 buildings, machinery and equipment, depreciation, losses,
4 and other proper purposes.

6 (c) Net income allocated to patron members in excess
7 of dividends on equity and additions to reserves shall be
8 distributed to patron members on the basis of patronage. A
9 cooperative may establish allocation units, whether the
10 units are functional, divisional, departmental, geographic,
11 or otherwise and pooling arrangements and may account for
12 and distribute net income to patrons on the basis of
13 allocation units and pooling arrangements. A cooperative
14 may offset the net loss of an allocation unit or pooling
15 arrangement against the net income of other allocation
16 units or pooling arrangements.

18 (d) Distribution of net income shall be made at least
19 annually. The board shall present to the members at their
20 annual meeting a report covering the operations of the
21 cooperative during the preceding fiscal year.

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1 (e) A cooperative may distribute net income to patron
2 members in cash, capital credits, allocated patronage
3 equities, revolving fund certificates, or its own or other
4 securities.

6 (f) The cooperative may provide in the bylaws that
7 nonmember patrons are allowed to participate in the
8 distribution of net income payable to patron members on
9 equal terms with patron members.

11 (g) If a nonmember patron with patronage credits is
12 not qualified or eligible for membership, a refund due may
13 be credited to the patron's individual account. The board
14 may issue a certificate of interest to reflect the credited
15 amount. After the patron is issued a certificate of
16 interest, the patron may participate in the distribution of
17 income on the same basis as a patron member.

19 17-10-235. Distribution of unclaimed property.

21 (a) A cooperative may, in lieu of paying or
22 delivering to the state the unclaimed property specified in
23 its report of unclaimed property, distribute the unclaimed

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1 property to a corporation or organization that is exempt
2 from taxation. A cooperative making the election to
3 distribute unclaimed property shall file with the secretary
4 of state:

6 (i) A verified written explanation of the proof
7 of claim of an owner establishing a right to receive the
8 abandoned property;

10 (ii) Any error in the presumption of
11 abandonment;

13 (iii) The name, address, and exemption number of
14 the corporation or organization to which the property was
15 or is to be distributed; and

17 (iv) The approximate date of distribution.

19 (b) This subsection does not alter the procedure
20 provided by law for cooperatives to report unclaimed
21 property to the state and the requirement that claims of
22 owners are made to the cooperatives for a period following
23 the publication of lists of abandoned property.

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2 (c) The right of an owner to unclaimed property held
3 by a cooperative is extinguished when the property is
4 disbursed by the cooperative to a tax exempt organization
5 in accordance with this section.

7 17-10-236. Merger and consolidation.

9 (a) Unless otherwise prohibited, cooperatives
10 organized under the laws of this state may merge or
11 consolidate with each other or other business entities
12 organized under the laws of this state or another state by
13 complying with the provisions of this section or the law of
14 the state where the surviving or new business entity will
15 exist.

17 (b) To initiate a merger or consolidation of a
18 cooperative, a written plan of merger or consolidation
19 shall be prepared by the board or by a committee selected
20 by the board to prepare a plan. The plan shall state:

22 (i) The names of the constituent cooperatives
23 and other business entities;

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2 (ii) The name of the surviving or new
3 cooperative or other business entity;

5 (iii) The manner and basis of converting
6 membership or ownership interests of the constituent
7 cooperatives or business entities into membership or
8 ownership interests in the surviving or new cooperative or
9 business entity;

11 (iv) The terms of the merger or consolidation;

13 (v) The proposed effect of the consolidation or
14 merger on the members and patron members of the
15 cooperative; and

17 (vi) For a consolidation, the plan shall contain
18 the articles of the entity or organizational documents to
19 be filed with the state in which the entity is organized.

21 (c) The following shall apply to notice:

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1 (i) The board shall mail a merger or
2 consolidation or otherwise transmit or deliver notice to
3 each member. The notice shall contain:

5 (A) The full text of the plan; and

7 (B) The time and place of the meeting at
8 which the plan will be considered.

10 (ii) A cooperative with more than two hundred
11 (200) members may provide the merger or consolidation
12 notice in the same manner as a regular members' meeting
13 notice.

15 (d) The following shall apply to the adoption of a
16 plan or merger or consolidation:

18 (i) A plan of merger or consolidation is adopted
19 if:

21 (A) A quorum of the members is registered
22 as being present or represented by mail vote at the
23 meeting; and

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2 (B) The plan is approved by two-thirds
3 (2/3) of the votes cast, or for a cooperative with articles
4 or bylaws requiring more than two-thirds (2/3) of the votes
5 cast or other conditions for approval, the plan is approved
6 by a proportion of the votes cast or a number of total
7 members as required by the articles or bylaws and the
8 conditions for approval in the articles or bylaws have been
9 satisfied.

11 (ii) After the plan has been adopted, articles
12 of merger or consolidation stating the plan and that the
13 plan was adopted according to this chapter shall be signed
14 by the chair, vice-chair, records officer or documents
15 officer of each cooperative merging or consolidating;

17 (iii) The articles of merger or consolidation
18 shall be filed in the office of the secretary of state;

20 (iv) For a merger, the articles of the surviving
21 cooperative subject to this chapter are deemed amended to
22 the extent provided in the articles of merger;

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1 (v) Unless a later date is provided in the plan,
2 the merger or consolidation is effective when the articles
3 of merger or consolidation are filed in the office of the
4 secretary of state;

6 (vi) The secretary of state shall issue a
7 certificate of organization of the merged or consolidated
8 cooperative.

10 (e) The following shall apply to the effect of a
11 merger:

13 (i) After the effective date, the cooperatives
14 or other business entities that are parties to the plan
15 become a single entity. For a merger, the surviving
16 business entity is the business entity designated in the
17 plan. For a consolidation, the new cooperative or other
18 business entity is the business entity provided for in the
19 plan. Except for the surviving or new business entity, the
20 separate existence of all business entities that are
21 parties to the plan cease on the effective date of the
22 merger or consolidation;

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1 (ii) The surviving or new business entity
2 possesses all of the rights and property of each of the
3 merged or consolidated business entities and is responsible
4 for all their obligations. The title to property of the
5 merged or consolidated business entity is vested in the
6 surviving or new business entity without reversion or
7 impairment of the title caused by the merger or
8 consolidation;

10 (iii) The right of a creditor may not be
11 impaired by the merger or consolidation without the
12 creditor's consent.

14 (f) The fee to be paid to the secretary of state for
15 filing articles of merger or consolidation shall conform
16 with the provisions of W.S. 17-16-122.

18 17-10-237. Liquidation.

20 (a) A cooperative shall be liquidated as provided in
21 the articles in a manner consistent with other business
22 entities organized in this state or if not provided, may be
23 liquidated in the same manner as a limited liability

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1 company organized in this state or the members may
2 authorize a liquidation by adopting a resolution at a
3 members' meeting. The notice of the members' meeting shall
4 include a statement that the disposition of all of the
5 assets of the cooperative will be considered at the
6 meeting. If a quorum is present in person, by mail ballot,
7 or alternative method approved by the board at the members'
8 meeting, the resolution approving of the liquidation is
9 adopted if:

11 (i) Approved by two-thirds (2/3) of the votes
12 cast; or

14 (ii) For a cooperative with articles or bylaws
15 requiring more than two-thirds (2/3) for approval or other
16 conditions for approval, the resolution is approved by the
17 proportion of the votes cast or a number of total members
18 as required by the articles or bylaws and the conditions
19 for approval in the articles or bylaws have been satisfied.

21 (b) The board of directors by resolution may
22 liquidate a cooperative if the board obtains an opinion of

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1 an accountant that the cooperative is unlikely to continue
2 as a business based on its current finances.

4 17-10-238. Methods of dissolution.

6 A cooperative may be dissolved by the members or by order
7 of the court.

9 17-10-239. Winding up.

11 (a) After the notice of intent to dissolve has been
12 filed with the secretary of state, the board, or the
13 officers acting under the direction of the board, shall
14 proceed as soon as possible:

16 (i) To collect or make provision for the
17 collection of all debts due or owing to the cooperative,
18 including unpaid subscriptions for shares; and

20 (ii) To pay or make provision for the payment of
21 all debts, obligations and liabilities of the cooperative
22 according to their priorities.

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1 (b) After the notice of intent to dissolve has been
2 filed with the secretary of state, the board may sell,
3 lease, transfer or otherwise dispose of all or
4 substantially all of the property and assets of the
5 dissolving cooperative without a vote of the members.

7 (c) Tangible and intangible property, including
8 money, remaining after the discharge of the debts,
9 obligations and liabilities of the cooperative may be
10 distributed to the members and former members as provided
11 in the bylaws. If previously authorized by the members, the
12 tangible and intangible property of the cooperative may be
13 liquidated and disposed of at the discretion of the board.

15 17-10-240. Revocation of dissolution proceedings.

17 (a) Dissolution proceedings may be revoked before the
18 articles of dissolution are filed with the secretary of
19 state.

21 (b) The chair may call a members' meeting to consider
22 the advisability of revoking the dissolution proceedings.
23 The question of the proposed revocation shall be submitted

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1 to the members at the members' meeting called to consider
2 the revocation. The dissolution proceedings are revoked if
3 the proposed revocation is approved at the members' meeting
4 by a majority of the members of the cooperative or for a
5 cooperative with articles or bylaws requiring a greater
6 number of members, the number of members required by the
7 articles or bylaws.

9 (c) Revocation of dissolution proceedings is
10 effective when a notice of revocation is filed with the
11 secretary of state. After the notice is filed, the
12 cooperative may resume business.

14 17-10-241. Statute of limitations.

16 The claim of a creditor or claimant against a dissolving
17 cooperative is barred if the claim has not been enforced by
18 initiating legal, administrative or arbitration proceedings
19 concerning the claim by two (2) years after the date the
20 notice of intent to dissolve is filed with the secretary of
21 state.

23 17-10-242. Articles of dissolution.

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2 (a) Articles of dissolution of a cooperative shall be
3 filed with the secretary of state after payment of the
4 claims of all known creditors and claimants has been made
5 or provided for and the remaining property has been
6 distributed by the board. The articles of dissolution shall
7 state:

9 (i) That all debts, obligations, and liabilities
10 of the cooperative have been paid or discharged or adequate
11 provisions have been made for them or time periods allowing
12 claims have run and other claims are not outstanding;

14 (ii) That the remaining property, assets, and
15 claims of the cooperative have been distributed among the
16 members or pursuant to a liquidation authorized by the
17 members; and

19 (iii) That legal, administrative, or arbitration
20 proceedings by or against the cooperative are not pending
21 or adequate provision has been made for the satisfaction of
22 a judgment, order or decree that may be entered against the
23 cooperative in a pending proceeding.

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2 (b) The cooperative is dissolved when the articles of
3 dissolution have been filed with the secretary of state.

5 (c) The secretary of state shall issue to the
6 dissolved cooperative or its legal representative a
7 certificate of dissolution that contains:

9 (i) The name of the dissolved cooperative;

11 (ii) The date the articles of dissolution were
12 filed with the secretary of state; and

14 (iii) A statement that the cooperative is
15 dissolved.

17 17-10-243. Application for court-supervised voluntary
18 dissolution.

20 After a notice of intent to dissolve has been filed with
21 the secretary of state and before a certificate of
22 dissolution has been issued, the cooperative or, for good
23 cause shown, a member or creditor may apply to a court

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1 within the county where the registered address is located
2 to have the dissolution conducted or continued under the
3 supervision of the court as provided in W.S. 17-10-250.

5 17-10-244. Court-ordered remedies or dissolution.

7 (a) A court may grant equitable relief that it deems
8 just and reasonable in the circumstances or may dissolve a
9 cooperative and liquidate its assets and business:

11 (i) In a supervised voluntary dissolution that
12 is applied for by the cooperative;

14 (ii) In an action by a member when it is
15 established that:

17 (A) The directors or the persons having the
18 authority otherwise vested in the board are deadlocked in
19 the management of the cooperative's affairs and the
20 shareholders or members are unable to break the deadlock;

22 (B) The directors or those in control of
23 the cooperative have acted fraudulently, illegally or in a

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1 manner unfairly prejudicial toward one (1) or more members
2 in their capacities as members, directors or officers;

4 (C) The members of the cooperative are so
5 divided in voting power that, for a period that includes
6 the time when two (2) consecutive regular members' meetings
7 were held, they have failed to elect successors to
8 directors whose terms have expired or would have expired
9 upon the election and qualification of their successors;

11 (D) The cooperative assets are being
12 misapplied or wasted; or

14 (E) The period of duration as provided in
15 the articles has expired and has not been extended as
16 provided in this chapter.

18 (iii) In an action by a creditor when:

20 (A) The claim of the creditor against the
21 cooperative has been reduced to judgment and an execution
22 on the judgment has been returned unsatisfied; or

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1 (B) The cooperative has admitted in writing
2 that the claim of the creditor against the cooperative is
3 due and owing and it is established that the cooperative is
4 unable to pay its debts in the ordinary course of business;
5 or

7 (iv) In an action by the attorney general to
8 dissolve the cooperative in accordance with this chapter
9 when it is established that a decree of dissolution is
10 appropriate.

12 (b) In determining whether to order equitable relief
13 or dissolution, the court shall take into consideration the
14 financial condition of the cooperative but may not refuse
15 to order equitable relief or dissolution solely on the
16 ground that the cooperative has accumulated operating net
17 income or current operating net income.

19 (c) In deciding whether to order dissolution of the
20 cooperative, the court shall consider whether lesser relief
21 suggested by one (1) or more parties, such as a form of
22 equitable relief or a partial liquidation, would be
23 adequate to permanently relieve the circumstances

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1 established under subparagraph (a)(ii)(B) or (C) of this
2 section. Lesser relief may be ordered if it would be
3 appropriate under the facts and circumstances of the case.

5 (d) If the court finds that a party to a proceeding
6 brought under this section has acted arbitrarily,
7 vexatiously, or otherwise not in good faith, the court may
8 in its discretion award reasonable expenses, including
9 attorneys' fees and disbursements, to any of the other
10 parties.

12 (e) Proceedings under this section shall be brought
13 in a court within the county where the registered address
14 of the cooperative is located.

16 (f) It is not necessary to make members parties to
17 the action or proceeding unless relief is sought against
18 them personally.

20 17-10-245. Procedure in involuntary or
21 court-supervised voluntary dissolution.

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1 (a) In dissolution proceedings before a hearing can
2 be completed the court may:

4 (i) Issue injunctions;

6 (ii) Appoint receivers with all powers and
7 duties that the court directs;

9 (iii) Take actions required to preserve the
10 cooperative's assets wherever located; and

12 (iv) Carry on the business of the cooperative.

14 (b) After a hearing is completed, on notice the court
15 directs to be given to parties to the proceedings and to
16 other parties in interest designated by the court, the
17 court may appoint a receiver to collect the cooperative's
18 assets, including amounts owing to the cooperative by
19 subscribers on account of an unpaid portion of the
20 consideration for the issuance of shares. A receiver has
21 authority, subject to the order of the court, to continue
22 the business of the cooperative and to sell, lease,

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1 transfer, or otherwise dispose of the property and assets
2 of the cooperative either at public or private sale.

4 (c) The assets of the cooperative or the proceeds
5 resulting from a sale, lease, transfer, or other
6 disposition shall be applied in the following order of
7 priority or:

9 (i) The costs and expenses of the proceedings,
10 including attorneys' fees and disbursements;

12 (ii) Debts, taxes and assessments due the United
13 States, this state and other states in that order;

15 (iii) Claims duly proved and allowed to
16 employees under the provisions of the workers' compensation
17 act except that claims under this clause may not be allowed
18 if the cooperative has carried workers' compensation
19 insurance, as provided by law, at the time the injury was
20 sustained;

22 (iv) Claims, including the value of all
23 compensation paid in a medium other than money, proved and

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1 allowed to employees for services performed within three
2 (3) months preceding the appointment of the receiver, if
3 any; and

5 (v) Other claims proved and allowed.

7 (d) After payment of the expenses of receivership and
8 claims of creditors are proved, the remaining assets, if
9 any, may be distributed to the members or distributed
10 pursuant to an approved liquidation plan.

12 17-10-246. Receiver qualifications and powers.

14 (a) A receiver shall be a natural person or a
15 domestic corporation or a foreign corporation authorized to
16 transact business in this state. A receiver shall give a
17 bond as directed by the court with the sureties required by
18 the court.

20 (b) A receiver may sue and defend in all courts as
21 receiver of the cooperative. The court appointing the
22 receiver has exclusive jurisdiction of the cooperative and
23 its property.

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2 17-10-247. Dissolution action by attorney general.

4 (a) A cooperative may be dissolved involuntarily by a
5 decree of a court in this state in an action filed by the
6 attorney general if it is established that:

8 (i) The articles and certificate of organization
9 were procured through fraud;

11 (ii) The cooperative was organized for a purpose
12 not permitted by this chapter or prohibited by state law;

14 (iii) The cooperative has flagrantly violated a
15 provision of this chapter, has violated a provision of this
16 chapter more than once or has violated more than one (1)
17 provision of this chapter; or

19 (iv) The cooperative has acted, or failed to
20 act, in a manner that constitutes surrender or abandonment
21 of the cooperative's franchise, privileges, or enterprise.

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1 (b) An action may not be commenced under this section
2 until thirty (30) days after notice to the cooperative by
3 the attorney general of the reason for the filing of the
4 action. If the reason for filing the action is an act that
5 the cooperative has done, or omitted to do, and the act or
6 omission may be corrected by an amendment of the articles
7 or bylaws or by performance of or abstention from the act,
8 the attorney general shall give the cooperative thirty (30)
9 additional days to make the correction before filing the
10 action.

12 17-10-248. Filing claims in court-supervised
13 dissolution proceedings.

15 (a) In proceedings to dissolve a cooperative, the
16 court may require all creditors and claimants of the
17 cooperative to file their claims under oath with the court
18 administrator or with the receiver in a form prescribed by
19 the court.

21 (b) If the court requires the filing of claims, the
22 court shall:

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1 (i) Set a date, by order, at least one hundred
2 twenty (120) days after the date the order is filed, as the
3 last day for the filing of claims; and

5 (ii) Prescribe the notice of the fixed date that
6 shall be given to creditors and claimants.

8 (c) Before the fixed date, the court may extend the
9 time for filing claims. Creditors and claimants failing to
10 file claims on or before the fixed date may be barred, by
11 order of court, from claiming an interest in or receiving
12 payment out of the property or assets of the cooperative.

14 17-10-249. Discontinuance of court-supervised
15 dissolution proceedings.

17 The involuntary or supervised voluntary dissolution of a
18 cooperative may be discontinued at any time during the
19 dissolution proceedings if it is established that cause for
20 dissolution does not exist. The court shall dismiss the
21 proceedings and direct the receiver, if any, to redeliver
22 to the cooperative its remaining property and assets.

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1 17-10-250. Court-supervised dissolution order.

3 (a) In an involuntary or supervised voluntary
4 dissolution after the costs and expenses of the proceedings
5 and all debts, obligations and liabilities of the
6 cooperative have been paid or discharged and the remaining
7 property and assets have been distributed to its members
8 or, if its property and assets are not sufficient to
9 satisfy and discharge the costs, expenses, debts,
10 obligations and liabilities, when all the property and
11 assets have been applied so far as they will go to their
12 payment according to their priorities, the court shall
13 enter an order dissolving the cooperative.

15 (b) When the order dissolving the cooperative or
16 association has been entered, the cooperative or
17 association is dissolved.

19 17-10-251. Filing court's dissolution order.

21 After the court enters an order dissolving a cooperative,
22 the court administrator shall cause a certified copy of the
23 dissolution order to be filed with the secretary of state.

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1 The secretary of state may not charge a fee for filing the
2 dissolution order.

4 17-10-252. Barring of claims.

6 (a) A person who is or becomes a creditor or claimant
7 before, during, or following the conclusion of dissolution
8 proceedings, who does not file a claim or pursue a remedy
9 in a legal, administrative or arbitration proceeding during
10 the pendency of the dissolution proceeding or has not
11 initiated a legal, administrative, or arbitration
12 proceeding before the commencement of the dissolution
13 proceedings and all those claiming through or under the
14 creditor or claimant, are forever barred from suing on that
15 claim or otherwise realizing upon or enforcing it, except
16 as provided in this section.

18 (b) By one (1) year after articles of dissolution
19 have been filed with the secretary of state pursuant to
20 this chapter or a dissolution order has been entered, a
21 creditor or claimant who shows good cause for not having
22 previously filed the claim may apply to a court in this
23 state to allow a claim:

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2 (i) Against the cooperative to the extent of
3 undistributed assets; or

5 (ii) If the undistributed assets are not
6 sufficient to satisfy the claim, the claim may be allowed
7 against a member to the extent of the distributions to
8 members in dissolution received by the member.

10 (c) Debts, obligations, and liabilities incurred
11 during dissolution proceedings shall be paid or provided
12 for by the cooperative before the distribution of assets to
13 a member. A person to whom this kind of debt, obligation,
14 or liability is owed but is not paid may pursue any remedy
15 against the officers, directors or members of the
16 cooperative before the expiration of the applicable statute
17 of limitations. This subsection does not apply to
18 dissolution under the supervision or order of a court.

20 17-10-253. Right to sue or defend after dissolution.

22 After a cooperative has been dissolved, any of its former
23 officers, directors or members may assert or defend, in the

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1 name of the cooperative, a claim by or against the
2 cooperative.

4 Section 2. This act is effective July 1, 2001.

6 (END)

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