Also known as: reorganizations · reorganize · reorganizes · reorganized · reorganizing · reorg · reorganisation
Written by attorneys · grounded in primary & secondary sources — see below
A corporate restructuring that alters ownership, capital structure, or form of securities through merger, consolidation, or court order. The change preserves proportional interests for existing owners without new consideration in many statutory contexts.
Roland Rhodes owned 600 shares of Regal Apparel when he executed his will devising those shares to his niece. Regal Apparel later reorganized into a holding company that issued equivalent shares in the new parent to existing owners. At death the niece claims the holding-company shares under the specific devise while the residuary beneficiary asserts they fall outside the will.
Riverside Healthcare entered Chapter 11 reorganization under federal law. The bankruptcy court approved a plan requiring amendment of the articles of incorporation. The designated officer files articles of amendment with the secretary of state to implement the plan without any board or shareholder vote.
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No. Under the accession rules, securities acquired through reorganization pass with the original specific devise when they result from corporate action without new consideration by the testator.
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Yes. When a court of competent jurisdiction orders a reorganization plan under federal law, the articles may be amended solely to carry out that plan without board or shareholder action.
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Reorganization shares arise from corporate-initiated structural changes and pass with the devise. Rights-offering shares require the testator to exercise a purchase option with personal funds and therefore fall outside the accession rule.
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