N.Y. Business Corporation Law § 909: Sale, lease, exchange or other disposition of assets

§ 909. Sale, lease, exchange or other disposition of assets.

(a) A sale, lease, exchange or other disposition of all or

substantially all the assets of a corporation, if not made in the usual

or regular course of the business actually conducted by such

corporation, shall be authorized only in accordance with the following

procedure:

(1) The board shall authorize the proposed sale, lease, exchange or

other disposition and direct its submission to a vote of shareholders.

(2) Notice of meeting shall be given to each shareholder of record,

whether or not entitled to vote.

(3) The shareholders shall approve such sale, lease, exchange or other

disposition and may fix, or may authorize the board to fix, any of the

terms and conditions thereof and the consideration to be received by the

corporation therefor, which may consist in whole or in part of cash or

other property, real or personal, including shares, bonds or other

securities of any other domestic or foreign corporation or corporations,

by vote at a meeting of shareholders of (A) for corporations in

existence on the effective date of this clause the certificate of

incorporation of which expressly provides such or corporations

incorporated after the effective date of this clause, a majority of the

votes of all outstanding shares entitled to vote thereon or (B) for

other corporations in existence on the effective date of this clause,

two-thirds of the votes of all outstanding shares entitled to vote

thereon.

(b) A recital in a deed, lease or other instrument of conveyance

executed by a corporation to the effect that the property described

therein does not constitute all or substantially all of the assets of

the corporation, or that the disposition of the property affected by

said instrument was made in the usual or regular course of business of

the corporation, or that the shareholders have duly authorized such

disposition, shall be presumptive evidence of the fact so recited.

(c) An action to set aside a deed, lease or other instrument of

conveyance executed by a corporation affecting real property or real and

personal property may not be maintained for failure to comply with the

requirements of paragraph (a) unless the action is commenced and a

notice of pendency of action is filed within one year after such

conveyance, lease or other instrumment is recorded or within six months

after this subdivision takes effect, whichever date occurs later.

(d) Whenever a transaction of the character described in paragraph (a)

involves a sale, lease, exchange or other disposition of all or

substantially all the assets of the corporation, including its name, to

a new corporation formed under the same name as the existing

corporation, upon the expiration of thirty days from the filing of the

certificate of incorporation of the new corporation, with the consent of

the state tax commission attached, the existing corporation shall be

automatically dissolved, unless, before the end of such thirty-day

period, such corporation has changed its name. The adjustment and

winding up of the affairs of such dissolved corporation shall proceed in

accordance with the provisions of article 10 (Non-judicial dissolution).

(e) The certificate of incorporation of a corporation formed under the

authority of paragraph (d) shall set forth the name of the existing

corporation, the date when its certificate of incorporation was filed by

the department of state, and that the shareholders of such corporation

have authorized the sale, lease, exchange or other disposition of all or

substantially all the assets of such corporation, including its name, to

the new corporation to be formed under the same name as the existing

corporation.

(f) Notwithstanding shareholder approval, the board may abandon the

proposed sale, lease, exchange or other disposition without further

action by the shareholders, subject to the rights, if any, of third

parties under any contract relating thereto.