501A.902 - ASSIGNMENT OF FINANCIAL RIGHTS.

        501A.902  ASSIGNMENT OF FINANCIAL RIGHTS.         1.  Assignment of financial rights permitted.  Except as      provided in subsection 3, a member's financial rights are      transferable in whole or in part.         2.  Effect of assignment of financial rights.  An assignment      of a member's financial rights entitles the assignee to receive, to      the extent assigned, only the share of profits and losses and the      distributions to which the assignor would otherwise be entitled.  An      assignment of a member's financial rights does not dissolve the      cooperative and does not entitle or empower the assignee to become a      member, to exercise any governance rights, to receive any notices      from the cooperative, or to cause dissolution.  The assignment shall      not allow the assignee to control the member's exercise of governance      or voting rights.         3.  Restrictions of assignment of financial rights.         a.  A restriction on the assignment of financial rights may be      imposed in the articles, in the bylaws, in a member control      agreement, by a resolution adopted by the members, by an agreement      among or other written action by the members, or by an agreement      among or other written action by the members and the cooperative.  A      restriction is not binding with respect to financial rights reflected      in the required records before the adoption of the restriction,      unless the owners of those financial rights are parties to the      agreement or voted in favor of the restriction.         b.  Subject to paragraph "c", a written restriction on the      assignment of financial rights that is not manifestly unreasonable      under the circumstances and is noted conspicuously in the required      records may be enforced against the owner of the restricted financial      rights or a successor or transferee of the owner, including a pledgee      or a legal representative.  Unless noted conspicuously in the      required records, a restriction, even though permitted by this      section, is ineffective against a person without knowledge of the      restriction.         c.  With regard to restrictions on the assignment of financial      rights, a would-be assignee of financial rights is entitled to rely      on a statement of membership interest issued by the cooperative under      section 501A.903.  A restriction on the assignment of financial      rights, which is otherwise valid and in effect at the time of the      issuance of a statement of membership interest but which is not      reflected in that statement, is ineffective against an assignee who      takes an assignment in reliance on the statement.         d.  Notwithstanding any provision of law, articles, bylaws,      member control agreement, other agreement, resolution, or action to      the contrary, a security interest in a member's financial rights may      be foreclosed and otherwise enforced, and a secured party may assign      a member's financial rights in accordance with the uniform commercial      code, chapter 554, without the consent or approval of the member      whose financial rights are subject to the security interest.  
         Section History: Recent Form
         2005 Acts, ch 135, §68         Referred to in § 501A.903