326 LAWS OF MARYLAND [CH. 135

stock in the successor otherwise deliverable pursuant to the
consolidation or merger in exchange for the shares so acquired
shall, unless otherwise provided in the articles, have the status
of authorized but unissued stock of the successor. No pro-
ceeding for reduction of the capital of the successor shall be
necessary to effect retirement of shares so acquired or reduc-
tion in the capital of the successor represented thereby.

PARTIAL LIQUIDATION AND REORGANIZATION

70. (Distributions in Partial Liquidation. ) (a) If author-
ized in the manner provided in subsection (b) of this section,
any corporation of this State may, from time to time, declare
a partial liquidating distribution to stockholders and in pay-
ment thereof may distribute a portion of its assets in cash
or property, subject to the following restrictions:

(1) No such distribution shall be declared or made at a
time when the corporation is insolvent or when the payment
of such distribution would render the corporation insolvent.
For the purposes of this section, a corporation shall be
deemed to be insolvent if its debts exceed its assets taken
at a fair valuation or if it is unable to meet its debts as they
mature in the usual course of business.

(2) No such distribution shall be declared or made to any

class of stockholders until all accumulated dividends on
classes of shares entitled to cumulative preferential dividends
have been fully paid or provided for, unless the distribution
is made to the holders of shares having preferential rights
in the order and to the extent of their respective priorities.

(3) No such distribution shall be declared or made to any
class of stockholders, the payment of which would reduce
the remaining net assets below the aggregate preferential
amount payable in the event of voluntary liquidation to the
holders of shares having preferential rights, unless the distri-
bution is made to the holders of shares having preferential
rights in the order and to the extent of their respective
priorities.

(4) No such distribution shall be declared or made when
the stated capital is impaired or when the payment thereof
would impair the stated capital of the corporation, but sub-
ject to the limitations imposed by this section, such distribu-
tions may be declared and made out of surplus, including
surplus arising from a reduction in the amount of the stated
capital made pursuant to the provisions of this Article.

(5) Each such distribution, when made, shall be identified
as a liquidating distribution and the amount per share as