§414D-252 - Grounds for judicial dissolution.
§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]