(1) A dissolved cooperative continues its existence but may not carry on any business except as is appropriate to wind up and liquidate its business and affairs, including:
Collecting its assets;
Disposing of its assets that will not be distributed in kind to its members or equityholders;
Discharging or making provision for discharging its liabilities;
Distributing its remaining assets among its members or equity holders according totheir interests; and
Doing every other act necessary to wind up and liquidate its business and affairs.
(2) Unless otherwise stated in the articles or bylaws, the assets shall be used to pay, in the following order:
Liquidation expenses, including reasonable payment and reimbursement for the timeand expenses of the trustees in liquidation and their consultants;
All debts and liabilities according to their respective priorities;
Amounts invested in the cooperative that have a specific preference in liquidationover other amounts invested in the cooperative;
Without priority and on a pro rata basis, amounts invested in the cooperative, whether as membership fees, common stock, or otherwise, which are required by the cooperative to be invested in order for a person to be a member or to be subject to per unit retains or be entitled to participate in the allocation of net margins on terms and conditions established in the cooperative's bylaws or by the cooperative's board;
Without priority and on a pro rata basis, retained patronage, per unit retains, otheramounts withheld from or allocated to a patron of the cooperative, or any direct contributions to the capital of the cooperative not described in paragraph (d) of this subsection (2), all as shown on the books and records of the cooperative;
Any remaining assets, including reserves, if any, shall be distributed among suchmembers of the cooperative, as shown in the records of the cooperative, without priority and on a pro rata basis, as shall be practicable as determined by the trustees in liquidation. In making their determination, the trustees in liquidation may limit those persons entitled to share in the distribution to persons entitled to share in the allocation of the cooperative's net margins during a limited specified period of time.
With respect to paragraphs (e) and (f), the amounts to be distributed shall be paid tothe persons entitled to them as promptly as reasonably possible after the filing of the articles of dissolution by the secretary of state, but in no event shall the distributions be made later than seven years following the filing of the articles of dissolution by the secretary of state unless distribution is prevented by circumstances beyond the control of the trustees in liquidation.
(3) Dissolution of a cooperative does not:
Transfer title to the cooperative's property;
Prevent transfer of its memberships or securities, although the authorization to dissolve may provide for closing the cooperative's membership, stock, or other equity transfer records;
Subject its directors or officers to standards of conduct different from those otherwiseapplicable to them prior to dissolution;
Change quorum or voting requirements for its board or members; change provisionsfor selection, resignation, or removal of its directors or officers, or both; or change provisions for amending its bylaws or its articles;
Prevent commencement of a proceeding by or against the cooperative in its cooperative name; or
Abate or suspend a proceeding pending by or against the cooperative on the effectivedate of dissolution.
(4) A dissolved cooperative may dispose of claims against it pursuant to sections 7-90911 and 7-90-912.
Source: L. 96: Entire article R&RE, p. 525, § 1, effective July 1. L. 2006: (4) added, p. 849, § 5, effective July 1.
Editor's note: This section is similar to former § 7-55-114 as it existed prior to 1996.