Question
Randall is the director of a corporation that is dissolving. The remaining shareholders are Paul and Nina. The sole remaining asset of the corporation is
Randall is the director of a corporation that is dissolving. The remaining shareholders are Paul and Nina. The sole remaining asset of the corporation is $500 cash. The corporation owes Martin $100 for supplies he provided. Paul and Nina petition Randall to distribute the remaining funds to them because Martin has not yet renewed his request for payment. Can Randall distribute the money to Paul and Nina?
a.) Maybe, but only if their combined investment was more than $500
b.) Yes, because a creditor has no right to repayment from a dissolving corporation
c.) No, because shareholders are not entitled to any payment from the dissolution of a business
d.) Yes, because a shareholder's right to liquidation is superior to the right of any creditor
e.) No, because Martin is entitled to have the debt repaid before Paul and Nina benefit
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