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Texas Business Organizations Code - Section 11.053. Property Applied To Discharge Liabilities And Obligations

Legal Research Home > Texas Lawyer > Business Organizations Code > Texas Business Organizations Code - Section 11.053. Property Applied To Discharge Liabilities And Obligations

§ 11.053. PROPERTY APPLIED TO DISCHARGE LIABILITIES AND 
OBLIGATIONS.  (a) Except as provided by Subsection (b) and the 
title of this code governing the domestic entity, a domestic entity 
in the process of winding up shall apply and distribute its property 
to discharge, or make adequate provision for the discharge of, all 
of the domestic entity's liabilities and obligations.
	(b)  Except as provided by the title of this code governing 
the domestic entity, if the property of a domestic entity is not 
sufficient to discharge all of the domestic entity's liabilities 
and obligations, the domestic entity shall:
		(1)  apply its property, to the extent possible, to the 
just and equitable discharge of its liabilities and obligations, 
including liabilities and obligations owed to owners or members, 
other than for distributions;  or
		(2)  make adequate provision for the application of the 
property described by Subdivision (1).
	(c)  Except as provided by the title of this code governing 
the domestic entity, after a domestic entity has discharged, or 
made adequate provision for the discharge of, all of its 
liabilities and obligations, the domestic entity shall distribute 
the remainder of its property, in cash or in kind, to the domestic 
entity's owners according to their respective rights and interests.
	(d)  A domestic entity may continue its business wholly or 
partly, including delaying the disposition of property of the 
domestic entity, for the limited period necessary to avoid 
unreasonable loss of the entity's property or business.

Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.                     

Last modified: August 11, 2007