SECTIONS 8710-8724 - California Statutes

CORPORATIONS CODE

SECTION 8710-8724

8710. The powers and duties of the directors (or other persons
appointed by the court pursuant to Section 8515) and officers after
commencement of a dissolution proceeding include, but are not limited
to, the following acts in the name and on behalf of the corporation:
(a) To elect officers and to employ agents and attorneys to
liquidate or wind up its affairs.
(b) To continue the conduct of the affairs of the corporation
insofar as necessary for the disposal or winding up thereof.
(c) To carry out contracts and collect, pay, compromise and settle
debts and claims for or against the corporation.
(d) To defend suits brought against the corporation.
(e) To sue, in the name of the corporation, for all sums due or
owing to the corporation or to recover any of its property.
(f) To collect any amounts remaining unpaid on memberships or to
recover unlawful distributions.
(g) To sell at public or private sale, exchange, convey or
otherwise dispose of all or any part of the assets of the corporation
for an amount deemed reasonable by the board without compliance with
the provisions of Section 7911 and to execute bills of sale and
deeds of conveyance in the name of the corporation.
(h) In general, to make contracts and to do any and all things in
the name of the corporation which may be proper or convenient for the
purposes of winding up, settling and liquidating the affairs of the
corporation.

8711. A vacancy on the board may be filled during a winding up
proceeding in the manner provided in Section 7224.

8712. When the identity of the directors or their right to hold
office is in doubt, or if they are dead or unable to act, or they
fail or refuse to act or their whereabouts cannot be ascertained, any
interested person, including the Attorney General in the case of
corporations holding assets in charitable trust, may petition the
superior court of the proper county to determine the identity of the
directors or, if there are no directors, to appoint directors to wind
up the affairs of the corporation, after hearing upon such notice to
such persons as the court may direct.

8713. (a) After determining that all the known debts and
liabilities of a corporation in the process of winding up have been
paid or adequately provided for, the board shall distribute all the
remaining corporate assets in the manner provided in Sections 8715 to
8717, inclusive.
(b) If the winding up is by court proceeding or subject to court
supervision, the distribution shall not be made until after the
expiration of any period for the presentation of claims that has been
prescribed by order of the court.
(c) Anything to the contrary notwithstanding, assets, if any,
which are not subject to attachment, execution or sale for the
corporation's debts and liabilities may be distributed pursuant to
Sections 8715 to 8717, inclusive, even though all debts and
liabilities have not been paid or adequately provided for.

8714. The payment of a debt or liability, whether the whereabouts
of the creditor is known or unknown, has been adequately provided for
if the payment has been provided for by either of the following
means:
(a) Payment thereof has been assumed or guaranteed in good faith
by one or more financially responsible persons or by the United
States government or any agency thereof, and the provision (including
the financial responsibility of such persons) was determined in good
faith and with reasonable care by the board to be adequate at the
time of any distribution of the assets by the board pursuant to this
chapter.
(b) The amount of the debt or liability has been deposited as
provided in Section 8720.
This section does not prescribe the exclusive means of making
adequate provision for debts and liabilities.

8715. After complying with the provisions of Section 8713, assets
held by a corporation upon a valid condition requiring return,
transfer, or conveyance, which condition has occurred or will occur,
shall be returned, transferred, or conveyed in accordance with the
condition.

8716. After complying with the provisions of Section 8713:
(a) Except as provided in Section 8715 those assets held by a
corporation in a charitable trust shall be disposed of on dissolution
in conformity with its articles or bylaws subject to complying with
the provisions of any trust under which such assets are held.
(b) Except as provided in subdivision (c), the disposition
required in subdivision (a) shall be made by decree of the superior
court of the proper county in proceedings to which the Attorney
General is a party. The decree shall be made upon petition therefor
by the Attorney General or, upon 30 days' notice to the Attorney
General, by any person concerned in the dissolution.
(c) The disposition required in subdivision (a) may be made
without the decree of the superior court, subject to the rights of
persons concerned in the dissolution, if the Attorney General makes a
written waiver of objections to the disposition.

8717. After complying with the provisions of Section 8713 and
except as otherwise provided in Sections 8715 and 8716, assets held
by a corporation shall be disposed of on dissolution as follows:
(a) If the articles or bylaws provide the manner of disposition,
the assets shall be disposed of in that manner.
(b) If the articles or bylaws do not provide the manner of
disposition, the assets shall be distributed among the members in
accordance with their respective rights therein.

8718. Subject to the provisions of any trust under which assets to
be distributed are held, distribution may be made either in money or
in property or securities and either in installments from time to
time or as a whole, if this can be done fairly and ratably and in
conformity with the provisions of the articles and bylaws and shall
be made as soon as reasonably consistent with the beneficial
liquidation of the corporation assets.

8719. (a) If a corporation in process of winding up has more than
one class of memberships outstanding, a plan of distribution of the
memberships, obligations or securities of any other corporation,
domestic or foreign, or assets other than money which is not in
accordance with the liquidation rights of any class or classes as
specified in the articles or bylaws may nevertheless be adopted if
approved by (1) the board and (2) by approval by the members (Section
5034) of each class. The plan may provide that such distribution is
in complete or partial satisfaction of the rights of any of such
members upon distribution and liquidation of the assets.
(b) A plan of distribution so approved shall be binding upon all
the members. The board shall cause notice of the adoption of the plan
to be given by mail within 20 days after its adoption to all holders
of memberships having a liquidation preference.

8720. (a) If any members, creditors, or other persons are unknown
or fail or refuse to accept their payment or distribution in cash or
property or their whereabouts cannot be ascertained after diligent
inquiry, or the existence or amount of a claim of a creditor, member
or other person is contingent, contested, or not determined, or if
the ownership of any memberships is in dispute, the corporation may
deposit any such payment, distribution, or the maximum amount of the
claim with the Controller in trust for the benefit of those lawfully
entitled to the payment, distribution, or the amount of the claim.
The payment or distribution shall be paid over by the depositary to
the lawful owners, their representatives or assigns, upon
satisfactory proof of title.
(b) For the purpose of providing for the transmittal, receipt,
accounting for, claiming, management, and investment of all money or
other property deposited with the Controller under subdivision (a),
the money or other property shall be deemed to be paid or delivered
for deposit with the Controller under Chapter 7 (commencing with
Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure,
and may be recovered in the manner prescribed in that chapter.

8721. (a) Whenever in the process of winding up a corporation any
distribution of assets has been made, otherwise than under an order
of court, without prior payment or adequate provision for payment of
any of the debts and liabilities of the corporation, any amount so
improperly distributed to any person may be recovered by the
corporation. Any of such persons may be joined as defendants in the
same action or be brought in on the motion of any other defendant.
(b) Suit may be brought in the name of the corporation to enforce
the liability under subdivision (a) against any or all persons
receiving the distribution by any one or more creditors of the
corporation, whether or not they have reduced their claims to
judgment.
(c) Members who satisfy any liability under this section shall
have the right of ratable contribution from other distributees
similarly liable. Any member who has been compelled to return to the
corporation more than the member's ratable share of the amount needed
to pay the debts and liabilities of the corporation may require that
the corporation recover from any or all of the other distributees
such proportion of the amounts received by them upon the improper
distribution as to give contribution to those held liable under this
section and make the distribution of the assets fair and ratable,
according to the respective rights and preferences of the
memberships, after payment or adequate provision for payment of all
the debts and liabilities of the corporation.
(d) As used in this section, "process of winding up" includes
proceedings under Chapters 15 (commencing with Section 8510) and 16
(commencing with Section 8610) and also any other distribution of
assets to persons made in contemplation of termination or abandonment
of the corporate business.

8722. (a) A corporation which is dissolved nevertheless continues
to exist for the purpose of winding up its affairs, prosecuting and
defending actions by or against it and enabling it to collect and
discharge obligations, dispose of and convey its property and collect
and divide its assets, but not for the purpose of continuing its
activities except so far as necessary for the winding up thereof.
(b) No action or proceeding to which a corporation is a party
abates by the dissolution of the corporation or by reason of
proceedings for winding up and dissolution thereof.
(c) Any assets inadvertently or otherwise omitted from the winding
up continue in the dissolved corporation for the benefit of the
persons entitled thereto upon dissolution of the corporation and on
realization shall be distributed accordingly.

8723. (a) (1) Causes of action against a dissolved corporation,
whether arising before or after the dissolution of the corporation,
may be enforced against any of the following:
(A) Against the dissolved corporation, to the extent of its
undistributed assets, including, without limitation, any insurance
assets held by the corporation that may be available to satisfy
claims.
(B) If any of the assets of the dissolved corporation have been
distributed to other persons, against those persons to the extent of
their pro rata share of the claim or to the extent of the corporate
assets distributed to them upon dissolution of the corporation,
whichever is less.
The total liability of a person under this section may not exceed
the total amount of assets of the dissolved corporation distributed
to that person upon dissolution of the corporation.
(2) Except as set forth in subdivision (c), all causes of action
against a person to whom assets were distributed arising under this
section are extinguished unless the claimant commences a proceeding
to enforce the cause of action against that person prior to the
earlier of the following:
(A) The expiration of the statute of limitations applicable to the
cause of action.
(B) Four years after the effective date of the dissolution of the
corporation.
(3) As a matter of procedure only, and not for purposes of
determining liability, persons to whom assets of a dissolved
corporation are distributed may be sued in the name of the
corporation upon any cause of action against the corporation. This
section does not affect the rights of the corporation or its
creditors under Section 2009, or the rights, if any, of creditors
under the Uniform Fraudulent Transfer Act, which may arise against
persons to whom those assets are distributed.
(4) This subdivision applies to corporations dissolved on or after
January 1, 2000. Corporations dissolved prior to that date are
subject to the law in effect prior to that date.
(b) Summons or other process against the corporation may be served
by delivering a copy thereof to an officer, director or person
having charge of its assets or, if none of these persons can be
found, to any agent upon whom process might be served at the time of
dissolution. If none of those persons can be found with due diligence
and it is so shown by affidavit to the satisfaction of the court,
then the court may make an order that summons or other process be
served upon the dissolved corporation by personally delivering a copy
thereof, together with a copy of the order, to the Secretary of
State or an assistant or deputy secretary of state, with an
additional copy of the summons or other process and order being
delivered to the Attorney General in the case of a corporation that
at the commencement of the dissolution proceedings held assets in
charitable trust. Service in this manner is deemed complete on the
10th day after delivery of the process to the Secretary of State, or
in the case of a corporation that at the commencement of the
dissolution proceedings held assets in charitable trust, upon the
10th day after the later of delivery of process to the Secretary of
State or Attorney General.
(c) The corporation shall survive and continue to exist
indefinitely for the purpose of being sued in any quiet title action.
Any judgment rendered in that action shall bind each of its members
or other persons having any equity or other interest in the
corporation, to the extent of their interest therein, and that action
shall have the same force and effect as an action brought under the
provisions of Sections 410.50 and 410.60 of the Code of Civil
Procedure. Service of summons or other process in that action may be
made as provided in Chapter 4 (commencing with Section 413.10) of
Title 5 of Part 2 of the Code of Civil Procedure or as provided in
subdivision (b).
(d) Upon receipt of that process and the fee therefor, the
Secretary of State forthwith shall give notice to the corporation as
provided in Section 1702.

8724. Without the approval of 100 percent of the members, any
contrary provision in this part or the articles or bylaws
notwithstanding, so long as there is any lot, parcel, area,
apartment, or unit for which an owners' association, created in
connection with any of the forms of development referred to in
Section 11004.5 of the Business and Professions Code, is obligated to
provide management, maintenance, preservation, or control, the
following shall apply:
(a) The owners' association or any person acting on its behalf
shall not do either of the following:
(1) Transfer all or substantially all of its assets.
(2) File a certificate of dissolution.
(b) No court shall enter an order declaring the owners'
association duly wound up and dissolved.