Evaluate the statements about liquidation and dissolution of cooperatives: I. The reserve fund shall be distributed among the members. II. Subsidies, donations, legacies, grants, and aids from any local or foreign institutions shall be escheated to the community where the cooperative operates. III. Payment to creditors shall be in accordance with the contract on which it is based and the Civil Code's rules on priority and concurrence of credits. Which set of evaluations is correct?

• A. False; False; False
• B. True; True; False
• C. False; False; True
• D. True; True; True

Answer: (C)

When a cooperative ends, the assets and funds are handled by rules that emphasize paying obligations first and protecting the remaining capital for proper purposes. The reserve fund is a capitalization safeguard, not a payout to members on dissolution. It exists to support the cooperative’s stability and future operations, so distributing it to members contradicts its purpose. That’s why the statement about the reserve fund being distributed among members is false.

Subsidies, donations, legacies, grants, and similar aids are provided for specific aims or tied to donor terms. They are not automatically turned over to the community or escheated simply because the cooperative dissolves. The idea that these external funds would automatically escheat to the local community doesn’t align with how donor conditions and civil-law dispositions typically work, so that statement is false.

When it comes to paying creditors, the process follows contractual arrangements and the Civil Code’s rules on priority and concurrence of credits. Secured claims and preferred creditors are addressed according to their agreements and statutory priority, with unsecured creditors receiving what remains in the proper order. This aligns with standard liquidation practice, making that statement true.

So, I and II are false, and III is true.