Subdivision 1. Conflict and procedure when conflict arises. (a) A contract or other transaction between a cooperative and one or more of its directors, or between a cooperative and a business entity in or of which one or more of its directors are governors, directors, managers, officers, or legal representatives or have a material financial interest, is not void or voidable because the director or directors or the other business entities are parties or because the director or directors are present at the meeting of the members or the board or a committee at which the contract or transaction is authorized, approved, or ratified, if:
(1) the contract or transaction was, and the person asserting the validity of the contract or transaction sustains the burden of establishing that the contract or transaction was, fair and reasonable as to the cooperative at the time it was authorized, approved, or ratified and:
(i) the material facts as to the contract or transaction and as to the director's or directors' interest are disclosed or known to the members; and
(ii) the material facts as to the contract or transaction and as to the director's or directors' interest are fully disclosed or known to the board or a committee, and the board or committee authorizes, approves, or ratifies the contract or transaction in good faith by a majority of the board or committee, but the interested director or directors are not counted in determining the presence of a quorum and must not vote; or
(2) the contract or transaction is a distribution, contract, or transaction that is made available to all members or patron members as part of the cooperative's business.
(b) If a committee is elected or appointed to authorize, ratify, or approve a contract or transaction under this section, the members of the committee must not have a conflict of interest and be charged with representing the best interests of the cooperative.
Subd. 2. Material financial interest. For purposes of this section:
(1) a resolution fixing the compensation of a director or fixing the compensation of another director as a director, officer, employee, or agent of the cooperative, is not void or voidable or considered to be a contract or other transaction between a cooperative and one or more of its directors for purposes of this section even though the director receiving the compensation fixed by the resolution is present and voting at the meeting of the board or a committee at which the resolution is authorized, approved, or ratified or even though other directors voting upon the resolution are also receiving compensation from the cooperative; and
(2) a director has a material financial interest in each organization in which the director or the spouse; parents; children and spouses of children; brothers and sisters and spouses of brothers and sisters; and the brothers and sisters of the spouse of the director or any combination of them have a material financial interest. For purposes of this section, a contract or other transaction between a cooperative and the spouse; parents; children and spouses of children; brothers and sisters and spouses of brothers and sisters; and the brothers and sisters of the spouse of a director or any combination of them, is considered to be a transaction between the cooperative and the director.
2003 c 105 art 1 s 34
Structure Minnesota Statutes
Chapters 300 - 323A — Business, Social, And Charitable Organizations
Chapter 308B — Cooperative Associations
Section 308B.005 — Definitions.
Section 308B.007 — Legal Recognition Of Electronic Records And Signatures.
Section 308B.101 — Reservation Of Right.
Section 308B.111 — Filing Fees.
Section 308B.115 — Registered Office And Agent.
Section 308B.121 — Annual Renewal.
Section 308B.152 — Foreign Cooperatives; Sections Applicable.
Section 308B.201 — Organizational Purpose.
Section 308B.205 — Organizers.
Section 308B.211 — Cooperative Name.
Section 308B.215 — Articles Of Organization.
Section 308B.221 — Amendment Of Articles.
Section 308B.225 — Amendment Of Organizational Documents To Be Governed By This Chapter.
Section 308B.231 — Curative Filing.
Section 308B.245 — Cooperative Records.
Section 308B.305 — Emergency Powers.
Section 308B.311 — Agricultural Product Marketing Contracts.
Section 308B.401 — Board Governs Cooperative.
Section 308B.405 — Number Of Directors.
Section 308B.411 — Election Of Directors.
Section 308B.415 — Filling Vacancies.
Section 308B.421 — Removal Of Directors.
Section 308B.425 — Board Of Directors' Meetings.
Section 308B.435 — Act Of Board Of Directors.
Section 308B.441 — Action Without A Meeting.
Section 308B.445 — Audit Committee.
Section 308B.451 — Committees.
Section 308B.455 — Standard Of Conduct.
Section 308B.461 — Director Conflicts Of Interest.
Section 308B.465 — Limitation Of Director's Liability.
Section 308B.471 — Indemnification.
Section 308B.505 — Member Not Liable For Cooperative Debts.
Section 308B.511 — Regular Members' Meetings.
Section 308B.515 — Special Members' Meetings.
Section 308B.521 — Certification Of Meeting Notice.
Section 308B.531 — Remote Communications For Member Meetings.
Section 308B.535 — Act Of Members.
Section 308B.541 — Action Without A Meeting.
Section 308B.545 — Member Voting Rights.
Section 308B.551 — Patron Member Voting Based On Patronage.
Section 308B.555 — Voting Rights.
Section 308B.561 — Voting By Organizations And Legal Representatives.
Section 308B.571 — Sale Of Property And Assets.
Section 308B.575 — Vote Of Ownership Interests Held By Cooperative.
Section 308B.601 — Membership Interests.
Section 308B.605 — Assignment Of Financial Rights.
Section 308B.611 — Nature Of A Membership Interest And Statement Of Interest Owned.
Section 308B.615 — Certificated Membership Interests.
Section 308B.621 — Lost Certificates; Replacement.
Section 308B.625 — Restriction On Transfer Or Registration Of Membership Interests.
Section 308B.627 — Member Control Agreements.
Section 308B.701 — Authorization, Form, And Acceptance Of Contributions.
Section 308B.705 — Restatement Of Value Of Previous Contributions.
Section 308B.711 — Contribution Agreements.
Section 308B.715 — Contribution Rights Agreements.
Section 308B.721 — Allocations And Distributions To Members.
Section 308B.725 — Allocations And Distributions To Patron Members.
Section 308B.735 — Distribution Of Unclaimed Property.
Section 308B.801 — Merger And Consolidation.
Section 308B.805 — Merger Of Subsidiary.
Section 308B.835 — Abandonment.
Section 308B.901 — Methods Of Dissolution.
Section 308B.903 — Notice Of Intent To Dissolve.
Section 308B.905 — Winding Up.
Section 308B.911 — Revocation Of Dissolution Proceedings.
Section 308B.915 — Statute Of Limitations.
Section 308B.921 — Articles Of Dissolution.
Section 308B.925 — Application For Court-supervised Voluntary Dissolution.
Section 308B.931 — Court-ordered Remedies Or Dissolution.
Section 308B.935 — Procedure In Involuntary Or Court-supervised Voluntary Dissolution.
Section 308B.941 — Receiver Qualifications And Powers.
Section 308B.945 — Dissolution Action By Attorney General; Administrative Dissolution.
Section 308B.951 — Filing Claims In Court-supervised Dissolution Proceedings.
Section 308B.955 — Discontinuance Of Court-supervised Dissolution Proceedings.
Section 308B.961 — Court-supervised Dissolution Order.
Section 308B.965 — Filing Court's Dissolution Order.
Section 308B.971 — Barring Of Claims.
Section 308B.975 — Right To Sue Or Defend After Dissolution.