§432:2-606  Injunction, liquidation,receivership of domestic society.  (a)  When the commissioner uponinvestigation finds that a domestic society:

(1)  Has exceeded its powers;

(2)  Has failed to comply with any provision of thisarticle;

(3)  Is not fulfilling its contracts in good faith;

(4)  Has a membership of less than four hundred afteran existence of one year or more; or

(5)  Is conducting business fraudulently or in amanner hazardous to its members, creditors, the public or the business;

the commissioner shall notify the society of suchdeficiency or deficiencies and state in writing the reasons for thecommissioner's dissatisfaction.  The commissioner shall at once issue a writtennotice to the society requiring that the deficiency or deficiencies which existare corrected.  After such notice the society shall have a thirty-day period inwhich to comply with the commissioner's request for correction.  If the societyfails to comply, the commissioner shall notify the society of such findings ofnoncompliance and require the society to show cause on a date named why itshould not be enjoined from carrying on any business until the violationcomplained of shall have been corrected, or why an action in quo warrantoshould not be commenced against the society.

(b)  If on such date the society does notpresent good and sufficient reasons why it should not be so enjoined or whysuch action should not be commenced, the commissioner may present the factsrelating thereto to the attorney general who shall, if the attorney generaldeems the circumstances warrant, commence an action to enjoin the society fromtransacting business or in quo warranto.

(c)  The court shall thereupon notify theofficers of the society of a hearing.  If after a full hearing it appears thatthe society should be so enjoined or liquidated or a receiver appointed, thecourt shall enter the necessary order.  No society so enjoined shall have theauthority to do business until:

(1)  The commissioner finds that the violationcomplained of has been corrected;

(2)  The costs of such action shall have been paid bythe society if the court finds that the society was in default as charged;

(3)  The court has dissolved its injunction; and

(4)  The commissioner has reinstated the certificateof authority.

(d)  If the court orders the societyliquidated, it shall be enjoined from carrying on any further business,whereupon the receiver of the society shall proceed at once to take possessionof the books, papers, money and other assets of the society and, under thedirection of the court, proceed forthwith to close the affairs of the societyand to distribute its funds to those entitled thereto.

(e)  No action under this section shall berecognized in any court of this State unless brought by the attorney generalupon request of the commissioner.  Whenever a receiver is to be appointed for adomestic society, the court shall appoint the commissioner as such receiver.

(f)  The provisions of this section relating tohearing by the commissioner, action by the attorney general at the request ofthe commissioner, hearing by the court, injunction and receivership shall beapplicable to a society which shall voluntarily determine to discontinuebusiness. [L 1987, c 347, pt of §2]