Under Minnesota law, a shareholder who opposes a merger, a share exchange, a conversion, a sale of all or substantially all of the company’s assets that needs a shareholder vote, or certain changes to the articles can refuse the deal’s price and be paid the “fair value” of the shares instead. That is the dissenters’ right, also called the appraisal right. It exists only for the corporate actions the statute lists, and the statute’s exclusions remove it for some shares and holders, including some exchange-listed shares and shares acquired after a record date fixed for the vote. For an asset sale, the right does not reach a disposition in dissolution, one under a court order, or “a disposition for cash on terms requiring that all or substantially all of the net proceeds of disposition be distributed to the shareholders in accordance with their respective interests within one year after the date of disposition.” The right is kept only by following written steps in order, and when the corporation holds a shareholder meeting on the action, the first step comes before the vote.

The rules sit in two sections of the Minnesota Business Corporation Act: Minn. Stat. § 302A.471 says when the right exists, and Minn. Stat. § 302A.473 sets the procedure. Minnesota appellate decisions add how a court values the shares and when a shareholder can do more than collect fair value. This page is written for a shareholder of a Minnesota corporation, including a minority owner, facing a transaction the majority wants. It is part of my work on ownership disputes among owners of closely held companies.

What Are Dissenters’ Rights for Minnesota Shareholders?

Dissenters’ rights let a shareholder of a Minnesota corporation opt out of certain major transactions and be paid the fair value of the shares, set by a court if the shareholder and the corporation cannot agree. The right replaces the deal price with a value the shareholder can contest.

The statute’s operative sentence is Minn. Stat. § 302A.471, subd. 1: “A shareholder of a corporation may dissent from, and obtain payment for the fair value of the shareholder’s shares in the event of, any of the following corporate actions.” The list that follows sets the triggers, subject to the exceptions in subdivision 3, and the next two sections cover both.

The right belongs to shareholders of a Minnesota corporation. Chapter 302A defines a corporation as one “other than a foreign corporation, organized for profit and incorporated under or governed by this chapter” (Minn. Stat. § 302A.011, subd. 8). A shareholder of a Delaware or other out-of-state corporation looks to that state’s statute.

Members of a Minnesota limited liability company work under different rules. A merger or exchange of a Minnesota LLC “must be consented to by all the members,” subject to § 322C.1015 (Minn. Stat. § 322C.1003, subd. 1). That consent rule is a default: “To the extent the operating agreement does not otherwise provide for a matter described in subdivision 1, this chapter governs the matter” (Minn. Stat. § 322C.0110, subd. 2). Section 322C.1015 restricts approval when a member “will have personal liability with respect to a surviving, constituent, converted, or domesticated organization” (Minn. Stat. § 322C.1015, subd. 1). In an oppression case, a court may order a remedy other than dissolution, including “the sale for fair value of all membership interests a member owns” to the company or one or more of the other members (Minn. Stat. § 322C.0701, subd. 2).

Which Corporate Actions Trigger Appraisal Rights?

Seven kinds of corporate action trigger the right: certain adverse amendments to the articles, an asset sale that needs a shareholder vote, a merger, a share exchange, and a conversion. The other two are an articles amendment combining shares that “reduces the number of shares of the class or series owned by the shareholder to a fraction of a share if the corporation exercises its right to repurchase the fractional share so created,” and any action the articles, bylaws, or board designate. The asset-sale trigger has three exclusions, set out in the asset-sale item below. Anything outside the list carries no appraisal right.

The categories in § 302A.471, subd. 1, in plain terms:

  1. Adverse articles amendments. The statute covers, “unless otherwise provided in the articles, an amendment of the articles that materially and adversely affects the rights or preferences of the shares of the dissenting shareholder in that it” does one of six listed things. These include altering a preferential or redemption right, removing preemptive rights, and an amendment that “excludes or limits the right of a shareholder to vote on a matter, or to cumulate votes, except as the right may be excluded or limited through the authorization or issuance of securities of an existing or new class or series with similar or different voting rights.”
  2. Sale of substantially all assets. The trigger is “a sale, lease, transfer, or other disposition of property and assets of the corporation that requires shareholder approval under section 302A.661, subdivision 2.” That vote is required only for a disposition “not in the usual and regular course of its business,” and it is not required if “the corporation retains a significant continuing business activity” (Minn. Stat. § 302A.661, subd. 2). Excluded are a disposition in dissolution, a disposition under a court order, and “a disposition for cash on terms requiring that all or substantially all of the net proceeds of disposition be distributed to the shareholders in accordance with their respective interests within one year after the date of disposition.”
  3. Mergers. The statute reaches “a plan of merger, whether under this chapter or under chapter 322C, to which the corporation is a constituent organization, except as provided in subdivision 3, and except for a plan of merger adopted under section 302A.626.” Minn. Stat. § 302A.626 governs a holding-company reorganization.
  4. Share exchanges. A plan of exchange in which the corporation’s shares will be acquired is covered, again subject to subdivision 3.
  5. Conversions. The right arises when “a plan of conversion is adopted by the corporation and becomes effective.”
  6. Share combinations that reduce a holding to a fraction of a share. The current statute covers “an amendment of the articles in connection with a combination of a class or series under section 302A.402 that reduces the number of shares of the class or series owned by the shareholder to a fraction of a share if the corporation exercises its right to repurchase the fractional share so created under section 302A.423.”
  7. Actions the company opts into. The list ends with “any other corporate action taken pursuant to a shareholder vote with respect to which the articles, the bylaws, or a resolution approved by the board directs that dissenting shareholders may obtain payment for their shares.”

The share-combination item matters to anyone reading older cases, such as U.S. Bank N.A. v. Cold Spring Granite Co., 802 N.W.2d 363 (Minn. 2011). There, the Minnesota Supreme Court applied the 2010 statute and held that “§ 302A.471 does not provide for dissenters’ rights in the event of a reverse stock split.” The current subdivision 1 now lists the fractional-share combination above. Minn. Stat. § 302A.423, subd. 2 makes the board’s fractional-share value conclusive absent fraud, “Subject to the rights, if any, of dissenting shareholders under section 302A.471.” I cover the tactic itself in reverse stock splits used to cash out minority owners.

A parent “owning at least 90 percent of the outstanding shares of each class and series of a subsidiary,” not counting classes or series that would otherwise not be entitled to vote on the merger, can merge it “without a vote of the shareholders or other owners of itself or any subsidiary” (Minn. Stat. § 302A.621, subd. 1). If the parent does not own all of the subsidiary’s stock immediately prior to the merger, the subsidiary’s other shareholders “have dissenters’ rights under sections 302A.471 (without regard to section 302A.471, subdivision 3) and 302A.473” (subd. 6). That is the classic freeze-out merger, and appraisal is the minority’s main protection in it.

When Do Appraisal Rights Not Apply?

Even when a listed action occurs, the right can be unavailable for particular shares or holders. The exclusions cover surviving-corporation shares that are not entitled to vote on the merger and are not canceled or exchanged in it, holders after the record date, and shares listed on a national securities exchange. The listing exclusion applies “other than in connection with a plan of merger adopted under section 302A.613, subdivision 4, or 302A.621,” so it does not reach a merger after a qualified tender or exchange offer or a short-form merger. Where the listing exclusion applies, the right returns for holders “required by the terms of the corporate action described in subdivision 1 to accept for such shares anything other than shares, or cash in lieu of fractional shares,” that meet the listing test “at the time the corporate action becomes effective.” In those transactions, a listed holder who receives qualifying listed shares and cash for fractional shares stays excluded.

The exclusions in § 302A.471, subd. 3, and the related limits in subd. 2:

  • Shares not entitled to vote on the merger. Unless the articles, bylaws, or a board resolution provide otherwise, the right “does not apply to a shareholder of (1) the surviving corporation in a merger with respect to shares of the shareholder that are not entitled to be voted on the merger and are not canceled or exchanged in the merger.” A parallel rule covers a share exchange.
  • Record date. If the board fixes a record date for the vote, “only shareholders as of the date fixed, and beneficial owners as of the date fixed who hold through shareholders, as provided in subdivision 2, may exercise dissenters’ rights.”
  • Exchange-listed shares. Outside a short-form merger or a merger after a qualified tender offer, the right “is not available for the holders of shares of any class or series of shares that is listed on any national securities exchange registered with the United States Securities and Exchange Commission.” The right returns for listed holders “who are required by the terms of the corporate action described in subdivision 1 to accept for such shares anything other than shares, or cash in lieu of fractional shares,” of a company meeting the listing test.
  • All or none. A shareholder “shall not assert dissenters’ rights as to less than all of the shares registered in the name of the shareholder” (subd. 2(a)), “unless the shareholder dissents with respect to all the shares that are beneficially owned by another person but registered in the name of the shareholder and discloses the name and address of each beneficial owner on whose behalf the shareholder dissents.”
  • Beneficial owners. A beneficial owner who is not the record holder may dissent only “if the beneficial owner submits to the corporation at the time of or before the assertion of the rights a written consent of the shareholder” (subd. 2(b)).

For an owner in a closely held Minnesota company whose shares are not listed on a national securities exchange, the listing exclusion does not apply. The record-date and all-or-none rules still do.

How Do You Preserve Dissenters’ Rights Before the Vote?

When the action goes to a shareholder meeting, you must file a written notice of intent to demand fair value with the corporation before the vote, and you must not vote those shares in favor. Missing either step loses the right for that transaction.

The rule is in § 302A.473, subd. 3: a shareholder entitled to dissent “must file with the corporation before the vote on the proposed action a written notice of intent to demand the fair value of the shares owned by the shareholder and must not vote the shares in favor of the proposed action.” Voting against or abstaining both satisfy the second condition. Neither one replaces the written notice.

The corporation’s meeting notice should tell you this is coming. Under subd. 2, “the notice of the meeting shall inform each shareholder of the right to dissent and shall include a copy of section 302A.471 and this section and a brief description of the procedure to be followed under these sections.” A merger is adopted when “approved by the affirmative vote of the holders of a majority of the voting power of all shares entitled to vote” (Minn. Stat. § 302A.613, subd. 2), so a minority holder’s vote alone may not stop the deal. The written notice is what keeps the payment right.

Three other routes change the first step:

  1. Written action instead of a meeting. When shareholders act in writing, there is no vote to precede. The corporation’s later notice goes “to all shareholders who did not sign or consent to a written action that gave effect to the action creating the right to obtain payment under section 302A.471” (subd. 4(a)). Signing the consent gives up that notice.
  2. Merger after a qualified tender offer. For a publicly held corporation that elects to send the notice, a dissenter “must not tender the shares owned by the shareholder in response to the offer and must file with the corporation a written notice of intent to demand the fair value of the shares owned by the shareholder,” and must file it before the offer is consummated (subd. 3).
  3. Short-form merger. No shareholder vote occurs, so there is no pre-vote notice. The process starts with the corporation’s notice under subdivision 4.

I suggest delivering the written notice in a form that leaves proof of receipt and date, because subdivision 3 requires filing it “before the vote on the proposed action,” and if the corporation petitions, “The court shall determine whether the shareholder or shareholders in question have fully complied with the requirements of this section” (subd. 7).

How Does the Demand and Payment Process Work?

After approval, the corporation sends a notice with a deadline to demand payment and deposit your shares. Once the action takes effect, it pays each dissenter who completed the required steps its own estimate of fair value plus interest, though it may withhold payment from a holder who was not a shareholder when the action was first announced to the public. If you think that payment is too low, you send your own written estimate and demand the difference.

The steps under § 302A.473, in order:

  1. The corporation’s notice. It must state “the address to which a demand for payment and certificates of certificated shares must be sent in order to obtain payment and the date by which they must be received” (subd. 4(a)(1)). It also includes a form to certify when you acquired the shares and a copy of the statutes.
  2. Your demand and deposit. “In order to receive the fair value of the shares, a dissenting shareholder must demand payment and deposit certificated shares or comply with any restrictions on transfer of uncertificated shares” within the period subdivision 4(b) sets, measured from the corporation’s notice. The notice states the date. I suggest calendaring that date the day the notice arrives, because subd. 4(b) conditions payment on meeting it. Until the action takes effect, “the dissenter retains all other rights of a shareholder.”
  3. The corporation’s payment. After the action takes effect, or after a valid demand if later, “the corporation shall remit to each dissenting shareholder who has complied with subdivisions 3 and 4 the amount the corporation estimates to be the fair value of the shares, plus interest.” The payment comes with a recent balance sheet and income statement, interim statements, and “an estimate by the corporation of the fair value of the shares and a brief description of the method used to reach the estimate” (subd. 5(a)).
  4. Your supplemental demand. If the payment looks low, “the dissenter may give written notice to the corporation of the dissenter’s own estimate of the fair value of the shares, plus interest,” and demand the difference, within the period subdivision 6 sets after the corporation mails its payment. “Otherwise, a dissenter is entitled only to the amount remitted by the corporation.”

Interest runs from shortly after the effective date at the rate “calculated at the rate provided in section 549.09, subdivision 1, paragraph (c), clause (1)” (subd. 1(d)).

Late buyers get different treatment. “The corporation may withhold the remittance described in paragraph (a) from a person who was not a shareholder on the date the action dissented from was first announced to the public” (subd. 5(b)). That holder receives the financial materials and an offer instead, and may decline it and make a subdivision 6 demand. “Failure to do so entitles the dissenter only to the amount offered.”

The financial statements that come with the payment may be the first full financial picture a minority owner receives. If you need records to prepare your own estimate, your inspection rights as a shareholder may help, but they do not outlast the transaction: “the dissenter retains all other rights of a shareholder until the proposed action takes effect” (subd. 4(b)).

What Happens in the Court Appraisal Proceeding?

If you serve a supplemental demand, the corporation must either pay what you demanded (or a negotiated amount) or file a court petition asking the court to set fair value. The dissenter does not start the lawsuit. The corporation does, and the court assesses the proceeding’s costs against it unless it shifts part or all of them to a dissenter whose demand was arbitrary, vexatious, or not in good faith. Those costs “do not include attorney fees” (MT Properties, Inc. v. CMC Real Estate Corp., 481 N.W.2d 383 (Minn. App. 1992)). The Court of Appeals later concluded that subdivision 8(a) “does not provide for assessment of the expenses of a dissenting shareholder’s privately retained appraisal expert against a prevailing corporation” (Peoplenet Communications Corp. v. Baillon Ventures, LLC, 781 N.W.2d 584 (Minn. App. 2010)).

Under § 302A.473, subd. 7, the corporation must, within the period that subdivision sets after receiving the demand, “either pay to the dissenter the amount demanded or agreed to by the dissenter after discussion with the corporation or file in court a petition requesting that the court determine the fair value of the shares, plus interest.” This step follows only a written supplemental demand under subdivision 6. The procedural details:

  • Where. “The petition shall be filed in the county in which the registered office of the corporation is located.” A surviving foreign corporation files where the Minnesota corporation’s last registered office was.
  • Who. The petition names every dissenter who made a supplemental demand and has not settled. The Minnesota Rules of Civil Procedure apply unless the statute provides otherwise.
  • Appraisers. “The court may appoint appraisers, with powers and authorities the court deems proper, to receive evidence on and recommend the amount of the fair value of the shares.”
  • Compliance. Along with fair value, the court “shall determine whether the shareholder or shareholders in question have fully complied with the requirements of this section.”
  • Judgment. A dissenter receives judgment in cash for any amount by which the court’s fair value, plus interest, exceeds the earlier payment, “but shall not be liable to the corporation for the amount, if any, by which the amount, if any, remitted to the dissenter under subdivision 5 exceeds the fair value of the shares as determined by the court, plus interest.”

Costs follow subdivision 8. The court “shall assess those costs and expenses against the corporation, except that the court may assess part or all of those costs and expenses against a dissenter whose action in demanding payment under subdivision 6 is found to be arbitrary, vexatious, or not in good faith.” Expert and attorney fees work differently: “If the court finds that the corporation has failed to comply substantially with this section, the court may assess all fees and expenses of any experts or attorneys as the court deems equitable.” Subdivision 8(b) continues: “These fees and expenses may also be assessed against a person who has acted arbitrarily, vexatiously, or not in good faith in bringing the proceeding, and may be awarded to a party injured by those actions.” Separately, under subdivision 8(c), “The court may award, in its discretion, fees and expenses to an attorney for the dissenters out of the amount awarded to the dissenters, if any.”

In MT Properties, Inc. v. CMC Real Estate Corp., 481 N.W.2d 383 (Minn. App. 1992), the trial court had found the dissenter’s challenge baseless and ordered it to pay the corporation’s fees. The Court of Appeals reversed because the dissenter’s argument on the discount had merit, and it remanded for costs to be assessed against the corporation under subdivision 8(a).

How Do Minnesota Courts Determine Fair Value?

Fair value is the value of the shares immediately before the transaction took effect, and the court may use any valuation method it finds sound. Minnesota appellate courts have barred a minority discount in a dissenters’ case and have treated a heavily traded stock’s market price as relevant evidence.

The statute fixes the date and leaves the method open. “Fair value of the shares” “means the value of the shares of a corporation immediately before the effective date of the corporate action referred to in section 302A.471, subdivision 1” (§ 302A.473, subd. 1(c)). The court determines it “taking into account any and all factors the court finds relevant, computed by any method or combination of methods that the court, in its discretion, sees fit to use, whether or not used by the corporation or by a dissenter” (subd. 7).

The cases fill in what fair value means:

  • Going-concern share, no minority discount. In MT Properties, the trial court had cut the dissenter’s one-ninth interest by 22% for minority status. The Court of Appeals held that “we must prohibit application of minority discounts when determining” fair value in statutory dissenters’ rights cases, reasoning that the statute exists to protect the dissenting shareholder.
  • Marketability discount, left open. The same opinion said that because its facts did not involve a marketability discount, “we express no opinion concerning the validity of such a discount under Minnesota law.”
  • The working definition. In a court-ordered buyout case, Advanced Communication Design, Inc. v. Follett, 615 N.W.2d 285 (Minn. 2000), the Minnesota Supreme Court defined fair value as “the pro rata share of the value of the corporation as a going concern.” It held that, “absent extraordinary circumstances, fair value in a court-ordered buy-out pursuant to section 302A.751 means a pro rata share of the value of the corporation as a going concern without discount for lack of marketability,” and found such circumstances on its facts. The Court of Appeals later quoted that definition in a dissenters’ case.
  • Market price and the deal price. In Rainforest Cafe, Inc. v. State Investment Board, 677 N.W.2d 443 (Minn. App. 2004), the district court gave no weight to four experts and set fair value at the $3.25 merger price, relying on market and transaction evidence. The Court of Appeals affirmed, describing market price as a “relevant measure of value when a stock is heavily traded.”
  • The majority’s vote is not evidence of value. The same court held that the fact that a substantial majority approved the merger “is not a relevant factor in determining the fair value of the corporation.”

For a closely held company with no trading market, Rainforest Cafe’s market-price reasoning has little to work with. Subdivision 7 lets the court use “any method or combination of methods that the court, in its discretion, sees fit to use,” and in Follett the Supreme Court said “the trial court may rely on proof of value by any technique that is generally accepted in the relevant financial community.” The corporation’s own estimate under subdivision 5 states its method, which is the place to start testing it.

Why Is Appraisal Usually a Dissenting Shareholder’s Only Remedy?

A shareholder who has the appraisal right generally cannot sue to undo the transaction. The statute bars setting aside or rescinding the action unless it is “fraudulent” toward the shareholder or the corporation, so a complaint about price alone leads back to appraisal.

The bar is in § 302A.471, subd. 4. Shareholders with the payment right, or who would have it but for the exchange-listing exclusion, “do not have a right at law or in equity to have a corporate action described in subdivision 1 set aside or rescinded, except when the corporate action is fraudulent with regard to the complaining shareholder or the corporation.”

In Sifferle v. Micom Corp., 384 N.W.2d 503 (Minn. App. 1986), a shareholder who had not asserted dissenters’ rights sued to set aside a going-private short-form merger. The Court of Appeals affirmed dismissal. It read “fraudulent” more broadly than common-law fraud, to reach a merger carried out “through deception, misrepresentation, actual fraud, or in violation of applicable statutes or articles of incorporation, or in violation of a fiduciary duty.” It also held the word does not reach an “entire fairness” challenge, and that “it is not a breach of fiduciary duty for the majority to use a freeze-out merger simply to eliminate minority shareholders in a public corporation.” Its decision states that appraisal is the exclusive remedy “unless there are allegations of misrepresentation, fraud, deceit, or breach of fiduciary duty involved in effecting the merger.”

Two limits on relying on Sifferle belong in any plan. First, it noted that “there is no bar to instituting an appraisal proceeding in addition to challenging the merger in an equitable proceeding on the grounds of fraud,” so a shareholder with a fraud claim should still preserve the appraisal right. Second, the Minnesota Supreme Court later declined to extend Sifferle’s broad reading to a different statute and wrote, “The continued validity of Sifferle is not before us, and we reach no opinion on that issue” (Cold Spring Granite, 802 N.W.2d 363).

A separate statute addresses the conduct of those in control of a corporation that is not publicly held. Minn. Stat. § 302A.751, subd. 1(b)(3) lets a court act when “the directors or those in control of the corporation have acted in a manner unfairly prejudicial toward one or more shareholders in their capacities as shareholders or directors of a corporation that is not a publicly held corporation, or as officers or employees of a closely held corporation.” A court-ordered buyout under § 302A.751 can borrow the appraisal statute’s valuation process: “If the parties are unable to agree on fair value within 40 days of entry of the order, the court shall determine the fair value of the shares under the provisions of section 302A.473, subdivision 7” (subd. 2). The buyout price is “the fair value of the shares as of the date of the commencement of the action or as of another date found equitable by the court,” and a price set in the bylaws, a shareholder control agreement, or the terms of the shares controls “unless the court determines that the price or terms are unreasonable under all the circumstances of the case.” In Cold Spring Granite, the Supreme Court analyzed the minority’s unfair-prejudice claim separately from its dissenters’ rights claim after a reverse split. Whether a shareholder oppression claim can proceed alongside a merger that triggers appraisal depends on facts this page cannot resolve, so I suggest preserving the appraisal right while that question is worked out, because the appraisal steps run on fixed deadlines.

Can I dissent if I bought my shares after the deal was announced?

Possibly, if you held the shares by any record date fixed for the vote. Under Minn. Stat. § 302A.471, subd. 3(b), when that date is fixed, only shareholders as of the date fixed, and beneficial owners as of the date fixed who hold through shareholders, may exercise dissenters’ rights. If you can dissent, the corporation may still hold back its payment. Under Minn. Stat. § 302A.473, subd. 5(b), the corporation may withhold the remittance from a person who was not a shareholder on the date the action was first announced to the public. It must instead send its financial materials, its reason, and an offer to pay its estimate. You may decline and give written notice of your own estimate and demand payment under subdivision 6, within the period it sets; failure to do so entitles the dissenter only to the amount offered.

Do I lose appraisal rights if I vote my shares for the merger?

Yes, when the vote happens at a shareholder meeting. Minn. Stat. § 302A.473, subd. 3 requires a shareholder who wishes to exercise dissenters’ rights to file a written notice of intent to demand fair value before the vote and not to vote the shares in favor of the proposed action. Voting against or abstaining both satisfy the voting condition, but neither replaces the written notice, which must reach the corporation before the vote.

Can I dissent with only some of my shares?

Not for shares you hold in your own name for yourself. Minn. Stat. § 302A.471, subd. 2(a) provides that a shareholder shall not assert dissenters’ rights as to less than all of the shares registered in the shareholder’s name. The exception is for shares held for another beneficial owner, if the shareholder dissents for all of that owner’s shares and discloses the owner’s name and address. A beneficial owner may dissent directly with the record holder’s written consent.

What if the court sets fair value below what the corporation already paid me?

You keep what the corporation already paid. Minn. Stat. § 302A.473, subd. 7 provides that a dissenter is entitled to judgment for any amount by which the court’s fair value, plus interest, exceeds the payment, but shall not be liable to the corporation for any amount by which the payment exceeds the court’s fair value. The court reaches value only after a written supplemental demand and the corporation’s petition. The court assesses costs, including the reasonable expenses of court-appointed appraisers, against the corporation, but may assess part or all of them against a dissenter whose demand is found to be arbitrary, vexatious, or not in good faith.

Will I have to pay the corporation's attorney fees if I lose on value?

Not ordinarily. Under Minn. Stat. § 302A.473, subd. 8, the court assesses the proceeding’s costs, including the reasonable expenses and compensation of court-appointed appraisers, against the corporation, but may assess part or all of those costs against a dissenter whose demand is found to be arbitrary, vexatious, or not in good faith. Expert and attorney fees may be assessed against a person who acted arbitrarily, vexatiously, or not in good faith in bringing the proceeding. The Minnesota Court of Appeals reversed a fee award against a dissenter whose position on a discount had merit.

Does an LLC member have the same appraisal rights?

Not under the corporate statute. Sections 302A.471 and 302A.473 apply to shareholders of a Minnesota corporation. For a Minnesota LLC, Minn. Stat. § 322C.1003, subd. 1 requires that a plan of merger or exchange be consented to by all the members, subject to § 322C.1015. That is a default rule: under Minn. Stat. § 322C.0110, subd. 2, the chapter governs a matter to the extent the operating agreement does not otherwise provide for it. In an oppression case, § 322C.0701, subd. 2 lets a court order a remedy other than dissolution, including the sale for fair value of a member’s interests to the company or one or more of the other members.

Planning Around a Dissent

For a Minnesota shareholder, dissenters’ rights come down to three things. The first is whether the transaction is on the statute’s list and no subdivision 3 exclusion reaches your shares. The second is whether you filed the written notice before any shareholder vote and did not vote in favor, and the third is whether you met each later deadline the corporation’s notice and the statute set. A shareholder who does those things is entitled to the fair value of the shares, without a minority discount. The court assesses the proceeding’s costs against the corporation unless it shifts part or all of them to a dissenter whose demand was arbitrary, vexatious, or not in good faith, and those costs “do not include attorney fees” (MT Properties). Under Peoplenet, subdivision 8(a) also “does not provide for assessment of the expenses of a dissenting shareholder’s privately retained appraisal expert against a prevailing corporation.” A shareholder who would rather leave on agreed terms may still be able to arrange a negotiated buyout before or alongside the statutory process. More on shareholder and co-owner conflicts is on my ownership disputes page. If you hold shares in a Minnesota corporation facing a merger, asset sale, or articles amendment, email [email protected] with a brief description. Please wait for an intake and conflict check before sending the meeting notice or any other confidential documents.