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Texas Business Organizations Code - Section 11.405. Appointment Of Receiver To Liquidate Domestic Entity; Liquidation

Legal Research Home > Texas Laws > Business Organizations Code > Texas Business Organizations Code - Section 11.405. Appointment Of Receiver To Liquidate Domestic Entity; Liquidation

§ 11.405. APPOINTMENT OF RECEIVER TO LIQUIDATE DOMESTIC 
ENTITY;  LIQUIDATION.  (a) Subject to Subsection (b), a court that 
has jurisdiction over the property and business of a domestic 
entity under Section 11.402(b) may order the liquidation of the 
property and business of the domestic entity and may appoint a 
receiver to effect the liquidation:
		(1)  when an action has been filed by the attorney 
general under this chapter to terminate the existence of the entity 
and it is established that liquidation of the entity's business and 
affairs should precede the entry of a decree of termination;
		(2)  on application of the entity to have its 
liquidation continued under the supervision of the court;
		(3)  if the entity is in receivership and the court does 
not find that any plan presented before the first anniversary of the 
date the receiver was appointed is feasible for remedying the 
condition requiring appointment of the receiver;
		(4)  on application of a creditor of the entity if it is 
established that irreparable damage will ensue to the unsecured 
creditors of the domestic entity as a class, generally, unless 
there is an immediate liquidation of the property of the domestic 
entity;  or
		(5)  on application of a member or director of a 
nonprofit corporation or cooperative association and it appears the 
entity is unable to carry out its purposes.
	(b)  A court may order a liquidation and appoint a receiver 
under Subsection (a) only if:
		(1)  the circumstances demand liquidation to avoid 
damage to interested persons;
		(2)  all other requirements of law are complied with;  
and                  
		(3)  the court determines that all other available 
legal and equitable remedies, including the appointment of a 
receiver for specific property of the domestic entity and 
appointment of a receiver to rehabilitate the domestic entity, are 
inadequate.
	(c)  If the condition necessitating the appointment of a 
receiver under this section is remedied, the receivership shall be 
terminated immediately, the management of the domestic entity shall 
be restored to its managerial officials, and the receiver shall 
redeliver to the domestic entity all of its property remaining in 
receivership.

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

Last modified: August 11, 2007