Section 11.01. Disposition and Pledging of Property. The Cooperative may not sell, lease, exchange, mortgage, pledge, or otherwise dispose of all or substantially all of the property of the Cooperative unless the following conditions and/or requirements have been met:
- A tendered offer must be made first to the Board of Directors.
- 2/3 of all directors must affirmatively authorize the submission of a tendered offer to the membership.
- The tendered offer must be for the entire system. Any tendered offer for the transfer of assets may NOT be considered for a portion of the system.
- No transfer of all or substantially all the assets may be considered, which is nothing more than an assignment of large segments of the assigned service area, unless the sale or the assignment of all the territory and the sale of all the assets proposed.
- Notwithstanding any article, bylaw, policy resolution or practice that has ever been utilized by this corporation to the contrary, neither proxy votes, telephone conferencing, write-in votes, nor absentee ballots may be utilized to establish a quorum for either the Board of Directors or the membership, nor for consideration or for counting in any voting of the Board of Directors, or the membership in any consideration of the transfer of all or substantially all of its property.
- No offer for the purchase of all or substantially all the assets the corporation may be considered if it does not include an assumption of all contractual obligations of the corporation, specifically including, but not limited to, the then existing total power requirements contract the corporation has with Hoosier Energy Rural Electric Cooperative, Inc. and all terms and conditions contained therein.
- No offer for the purchase of all or substantially all the assets of the corporation may be considered unless there have been 3 separate written appraisals from 3 independent, non-affiliated appraisers, expert in such matters, rendering opinions as to the value of the Cooperative with respect to such a sale, lease, lease-sale, exchange, transfer or other disposition and as to any other terms and conditions which should be considered. The 3 appraisers shall be designated by the Judge of the Circuit Court for the Judicial District in Indiana in which the Cooperative's headquarters are located. If such judge refuses or otherwise declines to make such designations, they shall be made by the Board of Directors.
- The Board of Directors shall first give every other rural electric cooperative corporately sited and operating in Indiana (which has not made such an offer for the sale, lease, lease-sale, exchange, transfer or other disposition) an opportunity to submit competing proposals before any tendered offer can be considered by the membership. Such opportunity to submit competing proposals shall be in the form of a written notice to such rural electric cooperatives, which notice shall be attached to a copy of the proposal which the Cooperative has already received and copies of the respective reports of the 3 appraisers. Such rural electric cooperatives shall be given not less than 45 days during which to submit competing proposals, and the actual minimum period within which proposals are to be submitted shall be stated in the written notice given to each.
- Upon a 2/3 vote of all directors under Section 1 l.0l(b) above, the Board of Directors may determine that the initial or any subsequent proposal may be submitted to the membership for consideration. Notwithstanding any article, bylaw, policy, resolution or practice that has ever been utilized by this corporation to the contrary, a special meeting of the membership to consider an offer for the sale, lease, lease-sale, exchange, transfer or other disposition cannot be held with less than 60 days notice to the members expressing in detail each of any such proposal: PROVIDED, that consideration and action by the members may be given at the next annual member meeting if the Board so determines and if such annual meeting is held not less than 60 days after the giving of notice of such meeting.
- No offer for the sale, lease, lease-sale, exchange, transfer or other disposition of all or substantially all of the assets of the corporation may be presented for approval to the membership prior to 180 days after the affirmative 2/3 approval of the Board of Directors.
- Membership approval of any offer for the sale, lease, lease-sale, exchange, transfer or other disposition of all or substantially all of the assets of the corporation must be authorized by a resolution duly adopted at a meeting of the members duly called and held and wherein a quorum was established of 50% of the members in person and which resolution shall have received the affirmative vote of at least 50% of all its members for each and every district from which the Board members are nominated and elected.
- Notwithstanding any article, bylaw, policy, resolution or practice that has ever been utilized by this corporation to the contrary, no member meeting called for the purpose of considering any offer for the sale, lease, lease-sale, exchange, transfer or other disposition of all or substantially all of the assets of the corporation may be adjourned if there is a lack of a quorum. If such meeting lacks a quorum to consider any such proposal, the process of calling a member meeting for such purpose must start over.
- Any corporate approved proposal for the sale, lease, lease-sale, exchange, transfer or other disposition of all or substantially all of the assets of the corporation shall be approved by the Indiana Utility Regulatory Commission; provided, however, that the Board of Directors of the corporation shall have full power and authority, without authorization by the members thereof, to do the following:
- to borrow moneys from any source and in such amounts as the Board may from time to time determine,
- to issue the Cooperative's obligations evidencing such borrowing,
- to mortgage or otherwise pledge or encumber any or all of the Cooperative's property or assets as security therefor, and/or
- to authorize the execution and delivery of a mortgage, or mortgages, or a deed or deeds of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the corporation, whether acquired or to be acquired and wherever situated, as well as the revenues therefrom, for the purpose of financing the construction or maintenance of the corporation's distribution system and for general plant as defined in the uniform system of accounts prescribed by the Indiana Utility Regulatory Commission, all upon such terms and conditions as the Board of Directors shall determine, to secure any indebtedness of the corporation to the United States of America or any agency or instrumentality thereof or to any financial institution, which action of the Board of Directors will be subject to the approval of the Indiana Utility Regulatory Commission, to the extent required by law. The Board of Directors shall also have full power and authority; without requirement of any member authorization or Commission approval, to sell, lease, lease-sell, exchange, transfer or otherwise dispose of merchandise, or of property no longer necessary or useful for the operation of the Cooperative, or of less than substantially all of the Cooperative's property and assets.
The provisions of this article shall not apply to a sale, lease, lease-sale, exchange, transfer or other disposition to one or more other rural electric cooperatives if the substantive or actual legal effect thereof is to merge or consolidate with such other one or more rural electric cooperatives. This Article may not be amended except upon 2/3 affirmative vote of the Board of Directors.
Section 11.02. Distribution of Surplus Assets on Dissolution. Upon the Cooperative's dissolution, any assets remaining after all liabilities or obligations of the Cooperative have been satisfied and discharged shall be allocated and retired to the then members on the basis of the then most current information.