This text of Iowa § 501A.1207 (Court-ordered remedies for dissolution) is published on Counsel Stack Legal Research, covering Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
1. Conditions for relief. A court may grant equitable relief that the court deems just and
reasonable in the circumstances or may dissolve a cooperative and liquidate its assets and
business as follows:
a. In a supervised voluntary dissolution that is applied for by the cooperative.
b. In an action by a member when it is established that any of the following apply:
(1)The directors or the persons having the authority otherwise vested in the board are
deadlocked in the management of the cooperative’s affairs and the members are unable to
break the deadlock.
(2)Thedirectorsorthoseincontrolofthecooperativehaveactedfraudulently,illegally,or
in a manner unfairly prejudicial toward one or more members in their capacities as members,
directors, or officers.
(3)The members of the cooperative ar
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1. Conditions for relief. A court may grant equitable relief that the court deems just and
reasonable in the circumstances or may dissolve a cooperative and liquidate its assets and
business as follows:
a. In a supervised voluntary dissolution that is applied for by the cooperative.
b. In an action by a member when it is established that any of the following apply:
(1) The directors or the persons having the authority otherwise vested in the board are
deadlocked in the management of the cooperative’s affairs and the members are unable to
break the deadlock.
(2) Thedirectorsorthoseincontrolofthecooperativehaveactedfraudulently,illegally,or
in a manner unfairly prejudicial toward one or more members in their capacities as members,
directors, or officers.
(3) The members of the cooperative are so divided in voting power that, for a period that
includes the time when two consecutive regular members’ meetings were held, they have
failed to elect successors to directors whose terms have expired or would have expired upon
the election and qualification of their successors.
(4) The cooperative assets are being misapplied or wasted.
(5) The period of duration as provided in the articles has expired and has not been
extended as provided in this chapter.
c. In an action by a creditor when any of the following applies:
(1) The claim of the creditor against the cooperative has been reduced to judgment and
an execution on the judgment has been returned unsatisfied.
(2) The cooperative has admitted in writing that the claim of the creditor against the
cooperative is due and owing and it is established that the cooperative is unable to pay its
debts in the ordinary course of business.
(3) In an action by the attorney general to dissolve the cooperative in accordance with this
chapter when it is established that a decree of dissolution is appropriate.
2. Condition of cooperative or association. In determining whether to order equitable
relief or dissolution, the court shall take into consideration the financial condition of the
cooperative, but shall not refuse to order equitable relief or dissolution solely on the grounds
that the cooperative has accumulated operating net income or current operating net income.
3. Dissolution as remedy. In deciding whether to order dissolution of the cooperative,
the court shall consider whether lesser relief suggested by one or more parties, such as a
form of equitable relief or a partial liquidation, would be adequate to permanently relieve the
circumstancesestablishedundersubsection1,paragraph“b”,subparagraph(1)or(2). Lesser
reliefmaybeorderedifitwouldbeappropriateunderthefactsandcircumstancesofthecase.
4. Expenses. Ifthecourtfindsthatapartytoaproceedingbroughtunderthissectionhas
acted arbitrarily, vexatiously, or otherwise not in good faith, the court may in its discretion
award reasonable expenses, including attorney fees and disbursements, to any of the other
parties.
5. Venue. Proceedings under this section shall be brought in a court within the county
where the registered address of the cooperative is located.
6. Parties. Itisnotnecessarytomakememberspartiestotheactionorproceedingunless
relief is sought against them personally.