29-2303. Approval of interest exchange

A. A plan of interest exchange is not effective unless it has been approved both:

1. By a domestic acquired entity:

(a) In accordance with the requirements, if any, in its governing statute and organizational documents for approval of an interest exchange.

(b) Except as otherwise provided in subsection D of this section, if neither its governing statute nor its organizational documents provide for approval of an interest exchange, in accordance with the requirements, if any, in its governing statute or organizational documents for approval of a merger, as if the interest exchange were a merger.

(c) If neither its governing statute nor its organizational documents provide for approval of an interest exchange or a merger, by all of the interest holders of the entity entitled to vote on or consent to any matter or, if there are no such interest holders, then by all of the governors of the entity.

2. In a record by each interest holder of a domestic acquired entity that will have interest holder liability for obligations that arise after the interest exchange becomes effective, unless both:

(a) The organizational documents of the entity expressly provide in a record for the approval of an interest exchange or a merger in which some or all of its interest holders become subject to interest holder liability by the vote or consent of fewer than all of the interest holders.

(b) The interest holder voted for or consented in a record to that provision of the organizational documents or became an interest holder after the adoption of that provision.

B. An interest exchange involving a foreign acquired entity is not effective unless it is approved by the foreign entity in accordance with the law of the foreign entity's jurisdiction of organization.

C. Except as otherwise provided in its governing statute or organizational documents, the interest holders of the acquiring entity are not required to approve the interest exchange.

D. A provision of the governing statute of a domestic acquired entity that would permit a merger between the acquired entity and the acquiring entity to be approved without the vote or consent of the interest holders of the acquired entity because of the percentage of interests in the acquired entity held by the acquiring entity does not apply to approval of an interest exchange under subsection A, paragraph 1, subdivision (b) of this section.