Return to Part III – Current land, villages corporation issues and events

Unit 11 – Corporate mergers

It is important to understand that in some areas quite significant amounts of land had been taken over by non-Native majority communities before ANCSA was negotiated and lands were withdrawn from the public domain to be made available for selection by the ANCs.   Non-Natives had filed claims on homesteads, developed town-sites and urban areas, as well as patenting mines and establishing canneries, and ANCSA allowed these pre-existing claims on land to stand. While the right of people to do this could certainly be questioned since all the land technically belonged to Alaska Natives before ANCSA, the reality was that the people who had established these claims had done so in good faith believing that the federal government, and later the state, had the right to convey these lands to them. If ANCSA had not included provisions for people with pre-existing legal claims to keep their lands the lawsuits would still be on-going today. As we will see at least one law suit by a non-Native property held up the transfer of land to a village corporation for many years.

Learning Objectives:
Upon the completion of Module 11 a student will be able to

  1. Describe two examples of villages that were challenged on their eligibility to organize under ANCSA and the eventual outcomes.
  2. Compare the enrollment processes in at least two different ANCSA regions.
  3. Describe at least two examples of ANCSA corporation mergers and the corporations that resulted from the mergers.
  4. Describe how merged ANCSA corporations might become “demerged.’

Reading assignment:

Lecture Notes:
Not everyone in the State of Alaska celebrated the passage of ANCSA. There were some who did not understand the legal rights that Alaska Natives had to the land and viewed ANCSA as a give-away of land to Alaska Natives. Resistance to ANCSA was strongest in locations where there were well-established non-Native communities especially when selection of ANCSA lands was going to restrict non-Native use of federal land. While ANCSA made provisions for non-Natives with prior existing claims of ownership to keep their property this did not mean that people who had leased federal land for some type of use like cattle grazing could continue their leases indefinitely. It was in the interest of these non-Native communities (and the State) to dispute the qualification of nearby Native communities for ANCSA lands and some did indeed initiate dispute. Woody Island’s eligibility was disputed by local residents and not confirmed until the case was decided by the U.S. Supreme Court in 2009. In August 2010 the Village of Alexander Creek near Anchorage was still attempting to gain recognition.

Some of the land-lease arrangements between the federal government and non-Natives involved lands that were made available for selection by the corporations. Under normal circumstances when ownership of leased property changes hands the existing lease is allowed to run until it is time for it to be renewed. At that time the new owner is free to impose whatever conditions they want on the lease or to choose not to renew it at all. This is a right that comes with property ownership under the western legal system, and it is well understood by people who do business within that system. In the case of the ANCs however, sometimes non-Natives have had trouble understanding that this right applies to the corporation lands.

ANCSA intended for village corporations to be able to select land adjacent to each respective village and specified the amount of land each village was entitled to. A village with 25 to 99 residents was entitled to 69,120 acres, 100 to 199 residents qualified the village for 92,160 acres, 200 to 399 residents gave the village 115,200 acres, 400 to 599 residents meant the village received 138,240 acres and a village with 600 or more residents obtained 161,280 acres under ANCSA § 14(a).

As you can see these are substantial acreages. In some cases there was no problem with a village selecting its lands close by because no-one else had established any form of residency near them. In the instances that a remote homestead or mine site pre-existed ANCSA these claims became known as in-holdings and were granted an easement for access. This was not so easy to do when villages existed in close proximity to each other or to non-Native settlements. These villages had to select land in other areas. If the village was located on an island the problem was compounded especially if other communities shared the island or the island itself was smaller than the land entitlement. Unit 11 looks at how the villages within the Koniag region dealt with these specific challenges.

Corporate mergers were allowed under ANCSA 7(b) for regional corporations provided this did not result in a total of less than seven corporations but none of the regions chose to merge. The language that governs the merger of village corporations either with each other or with the regional corporation is found in U.S. Code TITLE 43 > CHAPTER 33 > §  1627.

Several of the village corporations have merged with each other and some merged directly with the regional corporation. In the AHTNA region all of the villages merged with the region except for Chitina, while in the NANA region Kotzebue was the only village that did not merge with its regional corporation.

The “de-merger’ of ANCSA corporations became an issue after a merger between Koniag Inc. and most of the region’s village corporations. After a vote of all the shareholders agreeing to the merger a class action suit was filed by a group of shareholders claiming that the proxy statement they had received was false and misleading. After agreement from the court that this was indeed the case the villages were given the opportunity to “de-merge.’ All involved did so except for Larsen Bay and Karluk.

Study Questions:
This unit looks at corporate mergers and how/why they took place. Look at one of the mergers, either between village corporations and the regional corporation, or a merger between two or more village corporations, and discuss the benefits or drawbacks of the merger as you see them. If you were a shareholder of one of these merged corporations would you consider the merge to be a positive move? Why or why not?

Google search: Leisnoi, Inc. litigation

Review following websites:

Video & Audio files for this module are located here

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Images for Unit 11

Media for Unit 11

1. Mary Jane Nielsen — ANCSA corporation mergers, land issues 2. Miranda Wright — ANCSA corporation board roles, corporation mergers