California Corporations Code 6719 – (a) Whenever in the process of winding up a corporation any …
(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 the Attorney General or by any one or more creditors of the corporation, whether or not they have reduced their claims to judgment.
Terms Used In California Corporations Code 6719
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Person: includes a corporation as well as a natural person. See California Corporations Code 18
(c) As used in this section, “process of winding up” includes proceedings under Chapters 15 (commencing with Section 6510) and 16 (commencing with Section 6610) and also any other distribution of assets to persons made in contemplation of termination or abandonment of the corporate business.
(Added by Stats. 1978, Ch. 567.)