Common use of Order of Payment of Liabilities Upon Dissolution Clause in Contracts

Order of Payment of Liabilities Upon Dissolution. A. The distribution of payments of the Company in the process of winding-up shall be made in the following order: (i) All known debts and liabilities of the Company, excluding debts and liabilities to Members who are creditors of the Company; (ii) All known debts and liabilities of the Company owed to Members who are creditors of the Company; (iii) The remaining assets shall be distributed to the Members in accordance with their positive Capital Account balances. Such liquidating distributions shall be made by the end of the Company's taxable year in which the Company is liquidated, or, if later, within ninety (90) days after the date of such liquidation. B. The payment of a debt or liability, whether or not the whereabouts of the creditor is known, has been adequately provided for if: (i) Payment thereof has been assumed or guaranteed in good faith by one (1) or more financially responsible persons or by the United States government or any agency thereof; and the provision, including the financial responsibility of the person, was determined in good faith and with reasonable care by the Members or the Manager to be adequate at the time of any distribution of the assets pursuant to this Section. (ii) The amount of the debt or liability has been deposited.

Order of Payment of Liabilities Upon Dissolution. A. The distribution of payments After determining that all known debts and liabilities of the Company in the process of winding-up shall be made in the following order: (i) All known debts and liabilities of the Companyup, excluding including, without limitation, debts and liabilities to Members who are creditors of the Company; (ii) All known debts and liabilities of , have been paid or adequately provided for, the Company owed to Members who are creditors of the Company; (iii) The remaining assets shall be distributed to the Members in accordance with their positive Capital Account balances, after taking into account income and loss allocations for the Company’s taxable year during which liquidation occurs. Such liquidating distributions shall be made by the end of the Company's ’s taxable year in which the Company is liquidated, or, if later, within ninety (90) days after the date of such liquidation. B. The payment of a debt or liability, whether or not the whereabouts of the creditor is knownknown or unknown, has been adequately provided for ifif the payment has been provided for by either of the following means: (i) Payment thereof has been assumed or guaranteed in good faith by one (1) or more financially responsible persons or by the United States government or any agency thereof; , and the provision, including the financial responsibility of the personPerson, was determined in good faith and with reasonable care by the Members or the Manager Managers to be adequate at the time of any distribution of the assets pursuant to this Section. (ii) The amount of the debt or liability has been depositeddeposited as provided in the Corporations Code.