Corporations Code – CORP § 2007
(a) If the corporation in process of winding up has both preferred and common shares outstanding, a plan of distribution of the shares, obligations or securities of any other corporation, domestic or foreign, or assets other than money which is not in accordance with the liquidation rights of the preferred shares as specified in the articles may nevertheless be adopted if approved by (1) the board and (2) by approval of the outstanding shares ( Section 152 ) of each class. The plan may provide that such distribution is in complete or partial satisfaction of the rights of any of such shareholders upon distribution and liquidation of the assets.
(b) A plan of distribution so approved shall be binding upon all the shareholders except as provided in subdivision (c). The board shall cause notice of the adoption of the plan to be given by mail within 20 days after its adoption to all holders of shares having a liquidation preference.
(c) Shareholders having a liquidation preference who dissent from the plan of distribution are entitled to be paid the amount of their liquidation preference in cash if they file written demand for payment with the corporation within 30 days after the date of mailing of the notice of the adoption of the plan of distribution, unless the plan of distribution is abandoned. The demand shall state the number and class of the shares held of record by the shareholder in respect of which the shareholder claims payment.
(d) If any such demand for cash payment is filed, the board in its discretion may abandon the plan without further approval by the outstanding shares ( Section 152 ), and all shareholders shall then be entitled to distribution according to their rights and liquidation preferences in the process of winding up.
(e) This section shall not apply to a distribution in accordance with a reorganization the principal terms of which have been approved pursuant to subdivision (b) of Section 1202 .