2013 Maryland Code
CORPORATIONS AND ASSOCIATIONS
§ 5-5A-24 - Consolidation, merger, transfer of assets, dissolution, or division

(a) Application of Title 3; stockholder vote. --

(1) Except as provided in paragraph (2) of this subsection, a cooperative may consolidate, merge, transfer assets, dissolve, or divide in the manner provided in Title 3 of this article.

(2) (i) In the case of a cooperative with more than 10,000 voting members, wherever Title 3 of this article requires the affirmative vote of the members or stockholders, the members and stockholders entitled to vote shall approve the consolidation, merger, transfer of assets, dissolution, or division in the manner provided for in § 5-5A-21(a)(3) of this subtitle for amendments to the articles of incorporation.

(ii) This provision is reserved for the members and may not be the prerogative of the delegates.

(b) Procedure for dissolution. --

(1) A cooperative may, with proper notice, at any regular or special meeting of its members, be dissolved by a vote of two-thirds of the membership voting in person or by mail ballot. This right of dissolution is a right reserved for the membership and not the right of the delegates.

(2) On affirmative vote to dissolve the cooperative, 3 members shall be elected as trustees by a majority vote of the members voting at that regular or special meeting.

(3) The trustees, on behalf of the cooperative and within a time fixed in their designation or within any extension thereof, shall liquidate the assets of the cooperative and distribute the assets in the manner set forth in this section.

(c) Involuntary dissolution. -- A suit for involuntary dissolution of the cooperative organized under this subtitle may be instituted for the causes and prosecuted in the manner set forth in the general corporate law of Maryland. Assets shall be distributed in a manner set forth in this subtitle.

(d) Distribution of assets upon dissolution. -- When a cooperative is dissolved, its assets shall be distributed in the following manner and order:

(1) By paying its debts and expenses;

(2) By returning to the members the lesser of par value or book value of their shares, their membership capital, or allocated equity;

(3) By returning to the subscribers the lesser of par value or book value of amounts paid on their subscriptions;

(4) By returning to eligible patrons the lesser of par value or book value of the amount of net savings credited to their accounts toward the purchase of shares or membership; and

(5) By distributing any surplus as a gift to another cooperative or to a nonprofit, tax-exempt enterprise.