414D-252 Grounds for judicial dissolution. (a) The court may dissolve a corporation in a proceeding by the attorney general if it is established that:

(1) The corporation obtained its articles of incorporation through fraud;

(2) The corporation has continued to exceed or abuse the authority conferred upon it by law;

(3) The corporation is a public benefit corporation and the corporate assets are being misapplied or wasted; or

(4) The corporation is a public benefit corporation and is no longer able to carry out its activities.

(b) In a proceeding by fifty members or members holding five per cent of the voting power, whichever is less, or by a director or any person specified in the articles, the court may dissolve a corporation if it is established that:

(1) The directors are deadlocked in the management of the corporate affairs, and the members, if any, are unable to breach the deadlock;

(2) The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent;

(3) The members are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have, or would otherwise have, expired; or

(4) The corporate assets are being misapplied or wasted.

(c) The court may dissolve a corporation in a proceeding by a creditor if it is established that:

(1) The creditor's claim has been reduced to judgment, the execution on the judgment returned unsatisfied, and the corporation is insolvent; or

(2) The corporation has admitted in writing that the creditor's claim is due and owing and the corporation is insolvent.

(d) The court may dissolve a corporation in a proceeding by the corporation to have its voluntary dissolution continued under court supervision.

(e) Prior to dissolving a corporation, the court shall consider whether there are reasonable alternatives to dissolution, whether dissolution is in the public interest, provided the corporation serves a public purpose, and whether dissolution is the best way of protecting the interests of members. [L 2001, c 105, pt of 1; am L 2004, c 171, 11]

 

Previous Vol08_Ch0401-0429 Next