Corporations and Associations – Revisions

HB 1171 modifies Maryland corporate law to eliminate the requirement for stockholder approval when a corporation transfers assets used as collateral for mortgages, pledges, or security interests. It establishes two specific scenarios where such transfers can occur without stockholder consent: (1) when the secured party (e.g., lender) exercises rights under commercial law to transfer assets, or (2) when the board authorizes an alternative sale that reduces/eliminates the secured debt with asset value matching the debt amount. The bill also repeals outdated provisions about merger articles involving certain business entities. This change primarily affects corporations with secured loans, streamlining asset transfers during debt resolution. (Maryland House Bill 1171, introduced February 6, 2025)