Texas Business Organizations Code 200.202 – Limitations On Distributions
(a) A real estate investment trust may not make a distribution:
(1) if the real estate investment trust would be insolvent after the distribution; or
(2) that is more than the surplus of the real estate investment trust.
(b) Notwithstanding Subsection (a)(2), if the net assets of a real estate investment trust are not less than the amount of the proposed distribution, the real estate investment trust may make a distribution involving a purchase or redemption of its own shares if the purchase or redemption is made by the real estate investment trust to:
(1) eliminate fractional shares;
(2) collect or settle indebtedness owed by or to the real estate investment trust;
(3) pay dissenting shareholders entitled to receive payment for their shares under this chapter; or
(4) effect the purchase or redemption of redeemable shares in accordance with this code.
Terms Used In Texas Business Organizations Code 200.202
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Insolvent: means a person who is unable to pay the person's debts as they become due in the usual course of business or affairs. See Texas Business Organizations Code 1.002
- Real estate investment trust: means an entity governed as a real estate investment trust under Title 5. See Texas Business Organizations Code 1.002