Section 10A-3-7.11

Procedure in liquidation of corporation by court.

(a) In proceedings to liquidate the assets and affairs of a nonprofit corporation, the court shall have the power to issue restraining orders or injunctions, to appoint a receiver or receivers pendente lite, with the powers and duties as the court, from time to time, may direct, and to take other proceedings as may be requisite to preserve the corporate assets wherever situated, and carry on the affairs of the nonprofit corporation until a full hearing can be had.

(b) After a hearing had upon the notice as the court may direct to be given to all parties to the proceedings and to any other parties in interest designated by the court, the court may appoint a liquidating receiver or receivers with authority to collect the assets of the nonprofit corporation. The liquidating receiver or receivers shall have authority, subject to the order of the court, to sell, convey, and dispose of all or any part of the assets of the nonprofit corporation wherever situated, either at public or private sale. The order appointing the liquidating receiver or receivers shall state their powers and duties. The powers and duties may be increased or diminished at any time during the proceedings.

(c) The assets of the nonprofit corporation or the proceeds resulting from a sale, conveyance, or other disposition thereof shall be applied and distributed as follows:

(1) All costs and expenses of the court proceedings and all liabilities and obligations of the nonprofit corporation shall be paid, satisfied and discharged, or adequate provision shall be made therefor;

(2) Assets held by the nonprofit corporation upon condition requiring return, transfer or conveyance, which condition occurs by reason of the dissolution or liquidation, shall be returned, transferred, or conveyed in accordance with the requirements;

(3) Assets received and held by the nonprofit corporation subject to limitations permitting their use only for charitable, religious, eleemosynary, benevolent, educational, or similar purposes, but not held upon a condition requiring return, transfer, or conveyance by reason of the dissolution or liquidation, shall be transferred or conveyed to one or more domestic or foreign nonprofit corporations, societies, or organizations engaged in activities substantially similar to those of the dissolving or liquidating nonprofit corporation as the court may direct;

(4) Other assets, if any, shall be distributed in accordance with the provisions of the governing documents of the nonprofit corporation to the extent that the governing documents determine the distributive right of members, or any class or classes of members, or provide for distribution to others; and

(5) Any remaining assets may be distributed to the persons, societies, organizations or domestic or foreign corporations, whether for profit or nonprofit, specified in the plan of distribution adopted as provided in this chapter, or when no plan of distribution has been adopted, as the court may direct.

(d) The court shall have power to allow, from time to time, as expenses of the liquidation compensation to the receiver or receivers and to attorneys in the proceeding, and to direct the payment thereof out of the assets of the nonprofit corporation or the proceeds of any sale or disposition of the assets.

(e) A receiver of a nonprofit corporation appointed under the provisions of this section shall have authority to sue and defend in all courts in his or her own name as receiver of the corporation. The court appointing the receiver shall have exclusive jurisdiction of the nonprofit corporation and its property, wherever situated.

(Acts 1984, No. 84-290, p. 502, §58; §10-3A-150; amended and renumbered by Act 2009-513, p. 967, §192.)