265. Except for shares redeemed on their holder’s death or when the holder otherwise ceases to be a member of a mutual company, the company may not redeem shares if there are reasonable grounds for believing that the company is, or would after the payment be, unable to maintain, in accordance with section 74, adequate assets to meet its liabilities, as and when they become due, and adequate capital to ensure its sustainability.
A mutual company that redeems shares on their holder’s death or when the holder otherwise ceases to be a member of the mutual company may not pay the redemption price of the shares if the company would, after the payment, be unable to maintain such assets and such capital.
The former holder of those shares becomes a creditor of the company and is entitled to be paid as soon as the company may legally do so or, in the event of liquidation, is entitled to be collocated after the other creditors but ahead of the shareholders.
The company must provide an evidence of indebtedness to the former shareholder.