Security Center Protection Services, Inc. v. All-Pro Security, Inc.

hLOBRANO, Judge.

The issue in this appeal is whether, in the absence of fraud, the payment by a corporation to a former shareholder of a promissory note given as consideration for the redemption of that shareholder’s stock, and which payment renders the corporation insolvent, constitutes an illegal distribution of assets imposing liability on the former shareholder to the corporation’s creditors.

The facts of this case are undisputed. Pri- or to February, 1986 All Pro Security, Inc. (All-Pro) was owned by three shareholders: Louis Sepulveda, Henry Burkhardt and Frank Clement. On February 6,…