Texas § 21.308 PRIORITY OF DISTRIBUTIONS.

Texas Statutes

§ 21.308 — PRIORITY OF DISTRIBUTIONS.

Texas § 21.308

Code BOBusiness Organizations Code

This text of Texas § 21.308 (PRIORITY OF DISTRIBUTIONS.) is published on Counsel Stack Legal Research, covering Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Tex. Business Organizations Code Code Ann. § 21.308 (2026).

Text

Sec. 21.308. PRIORITY OF DISTRIBUTIONS.

(a)Except as provided by Subsection (b) or (c), a corporation's indebtedness that arises as a result of the declaration of a distribution and a corporation's indebtedness issued in a distribution are at parity with the corporation's indebtedness to its general, unsecured creditors.

(b)The indebtedness described by Subsection (a) shall be subordinated to the extent required by an agreement binding on the corporation on the date the indebtedness arises or if agreed to by the person to whom the indebtedness is owed or, with respect to indebtedness issued in a distribution, as provided by the corporation.

(c)The indebtedness described by Subsection (a) shall be secured to the extent required by an agreement binding on the corporation.

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Sec. 21.308. PRIORITY OF DISTRIBUTIONS. (a) Except as provided by Subsection (b) or (c), a corporation's indebtedness that arises as a result of the declaration of a distribution and a corporation's indebtedness issued in a distribution are at parity with the corporation's indebtedness to its general, unsecured creditors.
(b) The indebtedness described by Subsection (a) shall be subordinated to the extent required by an agreement binding on the corporation on the date the indebtedness arises or if agreed to by the person to whom the indebtedness is owed or, with respect to indebtedness issued in a distribution, as provided by the corporation.
(c) The indebtedness described by Subsection (a) shall be secured to the extent required by an agreement binding on the corporation.