17:48E-55 Continuation of health service corporation.
7. a. The legal existence of the health service corporation shall not terminate, and the converted insurer shall be a continuation of the health service corporation. The conversion shall only be a change in identity and form of organization. All property, assets, rights, liabilities, obligations, interests and relations of whatever kind of the health service corporation, including, but not limited to, any rights, duties and obligations pursuant to a collective bargaining agreement, shall continue and remain in the converted insurer. All actions and legal proceedings to which the health service corporation was a party prior to conversion shall be unaffected by the conversion. The subscribers of the health service corporation shall have no right to receive any assets, surplus, capital or other distribution, or to receive any stock or other ownership interest in the converted insurer or parent corporation in connection with the conversion.
b. So long as the foundation owns at least 10 percent of the shares of stock of the converted insurer or the parent corporation issued to the foundation at the effective time, the converted insurer or its parent corporation shall not issue any shares of capital stock or other securities convertible into shares of capital stock of the converted insurer or the parent corporation without the approval of the commissioner, who may approve the sale of additional shares of stock of the converted insurer or its parent corporation if the converted insurer demonstrates to the commissioner’s sole satisfaction that the sale would not materially dilute the value of the shares distributed to the foundation and that all shares and other securities sold pursuant to this subsection b. or subsection e. of section 6 of this act are priced in a manner consistent with the fair market value of the aggregate equity of the converted insurer or any parent corporation at the time of the sale. The sale of capital stock of the converted insurer or its parent corporation in a firm commitment underwritten public offering shall be presumed to satisfy the standards set forth in this subsection, as long as the capital stock is of the same class and series as the stock owned by the foundation.
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