16-1a-807. Effect of interest exchange.

497 words·~2 min read·/ut/title-16/chapter-1a/16-1a-807·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Effective 10/1/2026

(1)When an interest exchange in which the acquired entity is a domestic entity takes effect:

(a)each interest in the domestic acquired entity that is subject to the interest exchange is converted, and each interest holder of an interest is entitled only to:

(i)the rights provided to the interest holder:

(A)under the plan of interest exchange; or

(B)in the acquired entity's organic law; and

(ii)any appraisal rights provided in Section 16-1a-708 ;

(b)the acquiring entity becomes the interest holder of each interest in the acquired entity stated in the plan of interest exchange that the acquiring entity will acquire;

(c)the public organic record, if any, of the acquired entity is amended to the extent provided in the statement of interest exchange; and

(d)the private organic rules of the acquired entity that are to be in a record, if any, are amended to the extent provided in the plan of interest exchange.

(2)Except as otherwise provided in the organic law or organic rules of the acquired entity, an interest exchange does not give rise to any right that an interest holder, governor, or third party would have upon a dissolution, liquidation, or winding up of the acquired entity.

(3)When an interest exchange takes effect:

(a)a person that did not have interest holder liability with respect to the acquired entity and becomes subject to interest holder liability with respect to a domestic entity as a result of the interest exchange has interest holder liability only:

(i)to the extent provided by the organic law of the domestic entity; and

(ii)for a debt, obligation, or other liability that the domestic entity incurs after the interest exchange takes effect; and

(b)the following conditions apply to the interest holder liability of a person that no longer holds an interest in a domestic acquired entity if the person had interest holder liability in the domestic acquired entity:

(i)the interest exchange does not discharge any interest holder liability under the organic law of the domestic acquired entity to the extent the person incurred the interest holder liability before the interest exchange became effective;

(ii)the person does not have interest holder liability under the organic law of the domestic acquired entity for a debt, obligation, or other liability that the domestic acquired entity incurs after the interest exchange takes effect;

(iii)the person does not have interest holder liability under the organic law of the domestic entity for any debt, obligation, or other liability preserved under Subsection (3)(b)(i) as though the interest exchange had not occurred; and

(iv)the person has whatever rights of contribution from any other person in accordance with other law or the organic law or organic rules of the domestic acquired entity with respect to any interest holder liability preserved under Subsection (3)(b)(i) as if the interest exchange had not occurred.

Enacted by Chapter 93 , 2026 General Session