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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
among the shareholders according to their respective
rights and preferences or, if there are no
shareholders, to the persons entitled thereto. * * *
Therefore, in order to impose transferee liability on the
shareholders under this California law, respondent must prove
that the shareholders improperly distributed the assets of the
corporation.
At the time the corporation was liquidated, its liabilities
included outstanding loans from the shareholders of $96,678.12
On the basis of our findings in this case, we hold that
respondent has not shown that the assets the shareholders
received exceeded this amount.13 The corporate minutes signed by
Messrs. DeMarta and Norwalk and dated May 1, 1992, state:
It was resolved that the Corporation, DeMarta &
Norwalk, would distribute most of its assets and
liabilities to the shareholders.
Each shareholder would be distributed his share of
assets and liabilities (except for shareholders loans).
The net asset received by each shareholder would be
credited as payment toward his shareholder loan.
12Loans from shareholders increased by more than $74,000
from Jan. 1 to June 30, 1992.
13If we had upheld respondent's principal determination
regarding the value of the "customer-based intangibles", there
would be no question that the assets exceeded the corporate debt
owed to the shareholders.
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