§ 7-114-301 — Grounds for judicial dissolution

(1) A corporation may be
dissolved in a proceeding by the attorney general if it is established that:

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

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

(2) A corporation may be dissolved in a proceeding by a shareholder if it is
established that:

(a) The directors are deadlocked in the management of the corporate affairs,
the shareholders are unable to break the deadlock, and irreparable injury to the
corporation is threatened or being suffered, or the business and affairs of the
corporation can no longer be conducted to the advantage of the shareholders
generally, because of the deadlock;

(b) 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;

(c) The shareholders 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 expired or would have expired upon the
election of their successors;

(d) The corporate assets are being misapplied or wasted; or

(e) The corporation has abandoned its business and has failed within a
reasonable time to liquidate and distribute its assets and dissolve.

(3) A corporation may be dissolved in a proceeding by a creditor if it is
established that:

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

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

(4) (a) If a corporation has been dissolved by voluntary action taken under
part 1 of this article 114:

(I) The corporation may bring a proceeding to wind up and liquidate its
business and affairs under judicial supervision in accordance with section 7-114-302; and

(II) The attorney general, a shareholder, or a creditor, as the case may be,
may bring a proceeding to wind up and liquidate the business and affairs of the
corporation under judicial supervision in accordance with section 7-114-302, upon
establishing the grounds set forth for that person, respectively, in subsections (1) to
(3) of this section.

(b) As used in sections 7-114-302 to 7-114-304, a proceeding to dissolve a
corporation includes a proceeding brought under this subsection (4), and a decree
of dissolution includes an order of court entered in a proceeding under this
subsection (4) which directs that the business and affairs of a corporation shall be
wound up and liquidated under judicial supervision.

(5) Subsections (2)(a) to (2)(e) of this section do not apply in the case of a
corporation that, on the date of the filing of the proceeding, has a class or series of
shares that is:

(a) A covered security under section 18 (b)(1)(A) or 18 (b)(1)(B) of the federal
Securities Act of 1933, 15 U.S.C. sec. 77r (b)(1)(A) and 77r (b)(1)(B);

(b) Not a covered security but is traded in an organized market and has a
market value of at least twenty million dollars, exclusive of the value of the shares
held by the corporation's subsidiaries, senior executives, directors, and persons
known to the corporation owning more than ten percent of the shares; or

(c) Issued by an open-end management investment company registered with
the federal securities and exchange commission under the federal Investment
Company Act of 1940, 15 U.S.C. sec. 80a-1 et seq., and that may be redeemed at
the option of the holder at net asset value.

Legislative History

Source: L. 93: Entire article added, p. 830, � 1, effective July 1, 1994. L. 2004: (4)(b) amended, p. 1508, � 284, effective July 1. L. 2005: IP(4)(a) amended, p. 1219, � 29, effective October 1. L. 2019: (2)(c), (2)(d), and (4)(e) amended and (2)(e) and (5) added, (SB 19-86), ch. 166, p. 1960, � 57, effective July 1, 2020.