plan-of-liquidation-and-dissolution

name	plan-of-liquidation-and-dissolution
language	en
description	Drafts a U.S. corporate Plan of Liquidation and Dissolution for voluntary wind-downs. Triggers when inputs mention liquidation, voluntary dissolution, winding up, dissolution resolution, creditor claims period, Form 966, or shareholder distribution calculations. Use after board and shareholder authorization is complete.
tags	["agreement","corporate","drafting","transactional"]

Plan of Liquidation and Dissolution

Produces a governance-compliant dissolution plan covering approval history, creditor notice, claims administration, liquidation sequencing, distribution mechanics, tax clearance, and state termination filings.

Quick Start

Gather before drafting:

1. Entity docs — charter, bylaws, shareholder agreement, state of incorporation.
2. Board resolution — date, quorum, vote counts, authorization language.
3. Shareholder vote — consents or meeting results with class-vote handling if applicable.
4. Financials — stock ledger (class/rank), asset/liability schedules, pending litigation, tax status.
5. Filing requirements — state secretary of state forms/fees/waiting periods, Form 966 deadline.
6. Creditor communications plan — known creditor list, publication channel for unknown creditors.

Core Workflow

1. Build Entity & Jurisdiction Matrix

Item	Inputs	Controls
Entity identity	Legal name, formation state, tax ID, principal office	Mirror formation records exactly
Timeline	Target adoption, creditor response, filing dates	State-compliant intervals [VERIFY]
Approvals	Board + shareholder actions, class vote mechanics	Include vote tallies and rights analysis
Creditor admin	Known/unknown creditor list, claim deadlines, reserves	Align notice language with statute [VERIFY]
Distribution	Liabilities stack, reserves, preference classes	Document liquidation preference and conversion formula
Tax package	EIN, filing history, state tax IDs	Integrate Form 966 and final tax obligations

2. Draft Sections (Fixed Order)

1. Preamble & Recitals — corporate identity, statutory basis, date, reasoned basis.
2. Authorization — board meeting/consent details, shareholder vote by class, exhibit references.
3. Notice & Claims — delivery methods, deadlines, publication terms, claim form language.
4. Winding Up — contract closure, litigation handling, asset conversion strategy.
5. Priority Payments — expense waterfall: liquidation costs → wages → taxes → secured → unsecured → contingencies. Include reservation schedule.
6. Shareholder Distribution — class-based preference, pro rata mechanics, in-kind vs. cash, per-share calculation worksheet.
7. Tax & Compliance — Form 966 filing, final returns, state/federal clearances, record retention.
8. Dissolution Filings — Articles/Certificate of Dissolution, signature authority, filing checklist.
9. Execution — effective date, cure period, officer certification, signature blocks.

3. Deliverables Checklist

• [ ] Date-stamped preamble and recitals
• [ ] Governance evidence paragraph for each required threshold
• [ ] Creditor notice log template and publication proof list
• [ ] Reserve memo (disputed, environmental/contingent, tax exposure)
• [ ] Distribution worksheet by share class
• [ ] State filing exhibit index with filing copies
• [ ] Post-filing action list with retention and audit handling

Pitfalls & Checks

• Define "dissolved," "wound up," and "terminated" separately — never interchange without definition.
• Preserve board/shareholder decision chronology as enforceable fact paragraphs.
• Never state creditors are "waived" without documented statutory or consent basis.
• Unknown creditors: use published notice period exactly as permitted by state law [VERIFY].
• Include separate class distribution schedule whenever preferred rights exist, even if zero-value.
• Add statutory references only after jurisdiction verification [VERIFY].
• Nonprofit wind-down: route residual assets to qualified tax-exempt recipients per governing tax law [VERIFY].
• Retain closing papers and tax support for statutory period (typically 3–7 years; confirm exact duration).