§ 33-896 — Grounds for judicial dissolution.

Connecticut § 33-896

• Jurisdiction: Connecticut
• Title 33: Corporations
• Ch. 601: Business Corporations

Text

(a) The superior court for the judicial district where the corporation's principal office or, if none in this state, its registered office, is located may dissolve a corporation: (1) In a proceeding by a shareholder if it is established that: (A) (i) The directors are deadlocked in the management of the corporate affairs, (ii) the shareholders are unable to break the deadlock, and (iii) 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 (D) the corporate assets are being misapplied or wasted; (2) 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 returned unsatisfied and the corporation is insolvent; or (B) the corporation has admitted in writing that the creditor's claim is due and owing and the corporation is insolvent; or (3) In a proceeding by the corporation to have its voluntary dissolution continued under court supervision. (b) Subdivision (1) of subsection (a) of this section shall not apply in the case of a corporation that, on the date of the filing of the proceeding, has shares that are: (A) Listed on the New York Stock Exchange, the American Stock Exchange or any exchange owned or operated by the NASDAQ Stock Market LLC, or listed or quoted on a system owned or operated by the National Association of Securities Dealers, Inc.; or (B) not so listed or quoted, but are held by at least three hundred shareholders and the shares outstanding have a market value of at least twenty million dollars exclusive of the value of such shares held by the corporation's subsidiaries, senior executives, directors and beneficial shareholders owning more than ten per cent of such shares.

Legislative History

(P.A. 94-186, S. 173, 215; P.A. 96-271, S. 124, 254; P.A. 09-55, S. 23; P.A. 17-108, S. 45.) History: P.A. 94-186 effective January 1, 1997; P.A. 96-271 amended Subsec. (a)(1) to delete as grounds for dissolution Subpara. (A) re deadlock of the directors and Subpara. (C) re deadlock of the shareholders, relettering the remaining Subparas. accordingly, and amended Subsec. (b) to replace “articles” of incorporation with “certificate” of incorporation where appearing and replace in Subdiv. (2)(B) “agree upon or vote for directors as successors” with “elect successors”, effective January 1, 1997; P.A. 09-55 amended Subsec. (a)(1) to add new Subpara. (A) re director deadlock, redesignate existing Subpara. (A) as Subpara. (B), add Subpara. (C) re shareholder deadlock and redesignate existing Subpara. (B) as Subpara. (D), and replaced former Subsec. (b) re mandatory judicial dissolution with new Subsec. (b) re corporations to which provisions of Subsec. (a)(1) do not apply; P.A. 17-108 amended Subsec. (b) to delete definition of “beneficial shareholder”. Even where shareholder agreement contains a stalemate provision, the language must be clear and unequivocal before it will be held to waive stockholder's right to seek dissolution of the corporation. 55 CA 272. Subsec. (b): Where there is a continuing failure to hold annual meetings, and there appears to be no chance of breaking the deadlock between the parties, it is proper to dissolve the corporation. 55 CA 272.