Untitled Texas Attorney General Opinion ( 1942 )

OFFICE OF THE AlTORNEY GENERAL OF T’EXAS
AUSTIN
Opinion Ho 1
?e: c0fiaOiida4237 0r in ana*
aoqmnies under t. 400SO&
v a 'I 3.C.S. 19
+
You hsvs nubbnrilit to rel questions Fotolv-
1~8 the eonstruotion 0r m e8 04 'an 5041 Vemoa*r I?.-
VLed Civil statuts8 0r Tax 0 , 0 1*8 0 0&0lidttti08 0r
iJleuraAnae0oERpRn1atl.
alder Art*. 5040
hutare MdOF th.
t neau8arg to *mend
h it Bmhllo~ 6apltal oboak
5erger. . . . and req,uire
BfmRta aB repremz%ti.Rngthe
eiore insuranira ocmpmla8 dolnd a
rinsof4 wNah are and hvo Been subrtanti-
controlling sto8kholdare and rrhioh have
as.aotual.LJ aompatlng with @ash other,
hamp have b4.n~ pradoualy ortpuxlasQ under
1116 Rtete, atap unite or ocarolidate upon ma-
pliaooe with the terns, or thir law. Suoh aonsol~dation
shall not be m9otmted in riolatiori or the anti-trwt
and *ntl-monopoly lawn or this State. Berore auy rooh
aousolld8tian shall take plaar Elm psrtlos holding art leas8
two-thirda of the capital ntook of aaeb of the oeeganlos
h. 0. P. Lookhert, pa%s 2
shell vats in Zevor thereor at e separete aeetlnngor the
etookholdere of eaah aoapaay aalled ror euah purpoee.
Suah neatln$ map bs salled in bhe smnaer provided in
the by-lawa of the Faepestlve 0os;malee OF the Iawe ondor
tile& suab ooqmnlee are o~izeaiaed, 14 oalltig eprahl
awtijpig~ or etookhOldeF8, esoe# that eaoh ntoakboldor
ehall~,.be notlried by aall. of the time end plaae and obfeot
or 8wh 8+watg.*
.b.rtr5041 pravi4art
%%ch kapaaiee ptopoeiag to eoaeolldste aey unite
their aer;ate OS eap pert thersor and beoole inoorpmeted
in ona body m&r th* nupe or my OII, OF aolpa of a&
oarpeniar cc’ &&a~ eny otthas aam4 thet may bo a ilq!j UwJb
M b iea le
r teek
la a uo i
o%
o r p QF stita l ltQokhe OF B
te tno
OS eeoh of the ooqariiee ao.neelldatod,
the eotwl value
or whioh 8Doek fa t&a am ocwpuyl ehall beer the came pro-
portion to the eotual valw et. b&%atoak eurrwSueU by
luoh l tooklwl4~r + We entlti Beebe ot the mapany IPI
r~Qar:og maah 0 ::,, 8ese tb the MtiFe ae~ata of the
asw ooqmny, rhloh ““x% a a lhe21 be ago@4 qmn by the beard
or dlreatora or 088h”~o 1 gtsorldaQl thetileid hook-
holder8 (holding tw6- s* the rtook) rmr~et the
muting pwwiue4 r0r .ta, thi,weaodiry lr tia le,
d*lo@a
tha vahetlon ,ciaemte t&a samnittea ot Hieakhaldon
appointed br their reageattre bmrdr or dlreotore; 8r
*2. orprmqmaq aey teki owir all the aeeete of
the other aa%pas@e ptopoefm to oonmlldrta an4 ieme
6tO6k to theirrtiookbO’ld8Fs iS th* ~FOp6Stt66 tht th.
valuq,or 06el~ esoek b6we ta bha eatire value 09 the
ad&i of ~$hc.a++qq 6n vi&oh they asa rtoakkol~m?@,
aad for thijs gmrpcrrrethe aapikl etoak ei 6uoh pureslrrlng
emmy trry be inoreeeed, te now OF mey b* herearter pro-
vld.4 by l.ew.
“3:. In ~880 or awealfdatioe M~V the fleet 8 t1o11
pfovided in the rlret eubdivfeion hereof, the Weeies P BBer
ehsll upon proof tarnished of ooqlteeoe with the tenan
hereof’ WXIbeilM: ltlefied thet tba pFWmed oan*olidetlc#l
is ror the brrt interseta of Ohs llay holdem et the
reepotivo 06?~pmlem and MLde iii r ~@8e)rdt8nOt9 With leW&RU
e; ````````h~Q````~ P%.
nnd delltar a aharter CO *aOh LL@W O~puY*
#&. 0. P. xmkhart, pa@ 3
"4. SuQh ewwolidatfao shall uork a df8uolution of
the oompamie~ absorbd, but shall in 80 wise prrjudiaa the
right of aZig4xadftor of azip6uoh oorporatianto har4 pap
want O? hia debt out ot tha assets end property thwsof,
nor shall w oreditor be thereby daprived of, nor praju-
diOti iA .A$' Si&ht Of 80tkOn than peAfling @I' rxhtin& 01
whiah msy thsreaftm aslm a@Autt said oo~pany, and mr-
+icro or S~QIW Qf the proper offi44rs or a&eats of ssah
new tar r4orglrnlldd aorporatlon aball be doam saitioiant
aa to all or any of aaah 04qmni4s.
"5, AlI pOli410a of insuraaoa oatstaadlsg agsla8t
all s&oh aompaaies rhali by raamn of rueh aonselidatitwz
br arsumsd by ~tlha rcrorgluriadronpaty, aaQ they *hall carry
oat the tesiw Of suoh pdlioy on th4 t ot the lnsuror end
be astitlad 60 all the rlglhta and pr rrllagaa thsmof and the
;;;;m48 8oo~letiniF: on aaah polfog prior to sa0k aon8ollda-
.I
It till' ba &ba&xrad that the firat option pro+lQe&
br Art.504l pro~ldas teea n0vA80116e~tloA*and oontem letas thr
orgpmlaationof a naw aorposn$lpn to take over the baa zp
sass and
urotr or the croanolidatlng, obspaalas; nbilr the sa0oad O~%OA
aontsr fat48 a *m4rg4rP",with one vf' tha eorporatioo6 eontlaabg
it8 usfstume, but leqd.rlng Eke a'68ets OS tha othesrri
11n the 0880 qf the "ooaablLidntfOn*, 110 e A4B Of
vkdta-
the olmrtor of either of the corpwatians 18 iarolva )
tatas oont4mplatoa thr issuanos ol a sew abrter 60 a 31s~ mm-*.
'PhO 0Epikl. Rt?UOtUSO Of th0 “A4W 0mw” Il.86 ZtOt 4XO.d tee
aapltal struotwe or aithar of t&s aonsolldstina; BOQpU3lasf all
that 10 reqalred Is .+&at the aapital steak of thr4aw 0oapaAy~
be distributed among the stoakholdar8 of the 0QA8QliQatkrg 8014
orstlons in sush ammaw thr6t *the actual vaLlaO* 02 the sto0k
L the mw oosporatlongdtan to eaah storkheldw "shall bw tha
saaa proportion to tim aotual velua of the steak swrrs&itra4* by
sa6h 8tookbolPer *an tba~antirs assots of tha OOmpaAY aUSS*nd~iag
aash atook beara to thn aatlrs asaat&+f the A- OwQW.*
i..,
m. 0l.P. Lsakharti, page 1,
IA wbioh ther ire stookhoL40rsa, ths tnormso I@ not man5atvryg
,the, 0apital #took may s&saia the mm, baa say be rsa pesti-@
Aetgl(((;the st@akholdors ai tbc abaorblne and ths ebsor Ii
ad,ampany.
The 8eOanb branch Of pow question ingulres whsthar
upon *oonrollQatSon*, or apen *aorger” with SA 8ttsnCant larseas*
IA tha Oapita’l #tOOk Of the 8~WIving oo&qaAy for tha pltrpoae of
lff$ 0tiAgM .ppVStiO+Mt Plnong tha #tookholders Of t&e respae-
t~M~@oqaaio# of lts&ock, partlotiar assets as& ba deai@at&
aa rqpreaaatlng the aagltsl steel la the woonsolIUatadw 0-w
0~ the Qple hand, et as reproseating the Increa8o In cupit swok
la the %ar@ax* on the o6har.
XA tlilr 0i3nneotlon, toa asu oonemaed with the ltseo t
ffh/. 4720 upon oonsolldatioas OF aargars undar Art. 5040 an&
l
hrti. 4720 prorld*sr
Vihon the fkst reotlag of the 8toakholdscs shall bm
hali3 end tha ofriears a? tha OoapaJly ela&r9* the pm#i&wlt
or lrerstnry shall notify t&o Comlaslon~r~ arndhe aball
thmroupoa lmmdiataly make, or oauae to be u&o, at t&s 0x0
pan80 ot the oaapuby, a fall and thorsagh axamiaatlvn thumb.
Xf he rinds t&d all of the erpltel atoak of the ooopuiy,
awuattn& to not less thm oaa hundred thousaad dollars, hss
boon tally p&Q up an& Ss In the ou8to&y e? the nff&sars,
aIth8r la oaah ov seoarltlaa of t&s olsss in whloh sash o(*r
paalaa ars luthariaad bl this chqtaprbo bweet or lsaa tbeIir
funds, ho shall ``QWIta 6wh aoa~paay a aaftifiaate ai author-
ity to traaaast aaoh kind or kLnda ot i~snrranes ba&ers~ritbln
this stat* as sash 0rmm8 glsg B yly tar. WH%as m&ybe aathor-
Iaad by fita ohartaet wbiPh aertir P catsshall axpjra #&It&e
last day ot Plabroary aart aitor ths data 31 it8 is#uan~&
Before suah stitiflorte la Iasned, AQt l45e thaiI tw@ OffiO~S
of EUOR company shall emout atd file with ths GosYissiBd~
a sworu eohedule of all the. astratr of ~the ooqany -b&tad
84 hita upon suth esamfnatlaa , shoriug ths valqa UsraW, ED-
sa$har wItA s stern ststaaent that the 65a4 ere bona ifda,
%a wuon<io~ral and urianaumbarea pso-party of the oeqaaY
gad are rotth the emurats tatat#l in suoh aohdtalo. HO o``II&@
or fir& aattiffcate or aatbority ohall bo &ra~bml axeapt l.A
a6dordty hsrmith, regardleas ef the data 0% iillne 0r tha
utialto of inaorporation with the Comalralcw6r.*
&rer 0. P. Iaekhwt, pets 6
8. ?Y.?ni+ahild
Aari88M8