§ 48-64-301 — Grounds for judicial dissolution

(a) Any court of record with proper venue in accordance with § 48-64-302(a) may dissolve a corporation: (1) In a proceeding by the attorney general and reporter if it is established that the corporation: (A) Obtained its charter through fraud; (B) Has exceeded or abused the authority conferred upon it by law; (C) Has violated any provision of law resulting in the forfeiture of its charter; (D) Has carried on, conducted, or transacted its business or affairs in a persistently fraudulent or illegal manner; (E) Is a public benefit corporation and the corporate assets are being misapplied or wasted; or (F) Is a public benefit corporation and is no longer able to carry out its purposes; provided, that the enumeration of these grounds for dissolution shall not exclude actions or special proceedings by the attorney general and reporter or other state officials for the dissolution of a corporation for other causes as provided in this chapter or in any other statute of this state; (2) In a proceeding by fifty (50) members or members holding five percent (5%) of the voting power, whichever is less, or any person specified in this chapter, if it is established that: (A) The directors are deadlocked in the management of the corporate affairs, the members 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 generally conducted 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 members are deadlocked in voting power and have failed, for a period that includes at least two (2) 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 is a public benefit corporation and is no longer able to carry out its purposes; (3) 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; and (4) In a proceeding by the corporation to have its voluntary dissolution continued under court supervision. (b) With respect to actions based on subdivision (a)(2), (a)(3) or (a)(4), prior to dissolving a corporation, the court shall consider whether: (1) There are reasonable alternatives to dissolution; (2) Dissolution is in the public interest, if the corporation is a public benefit corporation; and (3) Dissolution is the best way of protecting the interests of members, if the corporation is a mutual benefit corporation.

Legislative History

Acts 1987, ch. 242, § 14.30; 1989, ch. 445, § 15.