CHAPTER 24. JUDICIAL DISSOLUTION
IC 23-17-24
Chapter 24. Judicial Dissolution
IC 23-17-24-1
Judicial dissolution; when allowable; factors considered
Sec. 1. (a) A circuit court or superior court may dissolve acorporation as follows:
(1) In a proceeding by the attorney general if one (1) of thefollowing is established:
(A) The corporation obtained the corporation's articles ofincorporation through fraud.
(B) The corporation has continued to exceed or abuse theauthority conferred upon the corporation by law.
(C) The corporation is a public benefit corporation and thecorporate assets are being misapplied or wasted.
(D) The corporation is a public benefit corporation and is nolonger able to carry out the corporation's purposes.
(2) Except as provided in the articles of incorporation or bylawsof a religious corporation, in a proceeding by fifty (50)members or members holding at least five percent (5%) of thevoting power, whichever is less, or by a director or a personspecified in articles of corporation, if one (1) of the followingis established:
(A) The directors are deadlocked in the management of thecorporate affairs, and the members, if any, are unable tobreak the deadlock.
(B) The directors or those in control of the corporation haveacted, are acting, or will act in a manner that is illegal,oppressive, or fraudulent.
(C) The members have deadlocked in voting power and havefailed, for a period that includes at least two (2) consecutiveannual meeting dates, to elect successors to directors whoseterms have, or would otherwise have, expired.
(D) The corporate assets are being misapplied or wasted.
(E) The corporation is a public benefit or religiouscorporation and is no longer able to carry out thecorporation's purposes.
(3) In a proceeding by a creditor if either of the following isestablished:
(A) The creditor's claim has been reduced to judgment, theexecution on the judgment returned unsatisfied, and thecorporation is insolvent.
(B) The corporation has admitted in writing that thecreditor's claim is due and owing and the corporation isinsolvent.
(4) In a proceeding by the corporation to have the corporation'svoluntary dissolution continued under court supervision.
(b) Before dissolving a corporation, a court must consider thefollowing:
(1) Reasonable alternatives to dissolution. (2) If dissolution is in the public interest if the corporation is apublic benefit corporation.
(3) If dissolution is the best way of protecting the interests ofmembers if the corporation is a mutual benefit corporation.
As added by P.L.179-1991, SEC.1.
IC 23-17-24-1.5
Remedies
Sec. 1.5. (a) This section applies to the following:
(1) Notwithstanding IC 23-17-1-1, all corporations organizedunder Indiana law for a purpose for which a corporation may beorganized under this article, regardless of the date ofincorporation.
(2) A foreign corporation that desires to transact business inIndiana.
(b) In addition to a dissolution under section 1 of this chapter, theattorney general may petition a court to issue one (1) or more of thefollowing remedies:
(1) Injunctive relief.
(2) Appointment of temporary or permanent receivers.
(3) Permanent removal of trustees, corporate officers, ordirectors who have breached the fiduciary duty.
(4) Appointment of permanent court approved replacementtrustees, corporate officers or directors, and members.
(c) The attorney general may seek a remedy against any or all ofthe following:
(1) If the attorney general establishes a condition enumerated insection 1(a)(1) of this chapter, a corporation.
(2) For a violation of the officer's duties under IC 23-17-14-2,a corporate officer.
(3) For a violation of IC 23-17-13, a corporate director.
As added by P.L.245-2005, SEC.4.
IC 23-17-24-2
Venue; parties; judicial authority; notice to attorney general
Sec. 2. (a) Venue for a proceeding brought by the attorney generalagainst a corporation or its officers or directors lies in MarionCounty. Venue for a proceeding brought by any other party namedunder section 1 of this chapter lies in the county where:
(1) a corporation's principal office is or was last located; or
(2) if the principal office is not located in Indiana, thecorporation's registered office is or was last located.
(b) A director or a member does not have to be made a party to aproceeding to dissolve a corporation unless relief is sought againsta director or a member individually.
(c) A court in a proceeding brought to dissolve a corporation maydo the following:
(1) Issue injunctions.
(2) Appoint a receiver or custodian pendente lite with allpowers and duties the court directs. (3) Take other action required to preserve the corporate assetswherever located.
(4) Carry on the activities of the corporation until a full hearingcan be held.
(d) A person other than the attorney general who brings aninvoluntary dissolution proceeding for a public benefit or religiouscorporation shall give written notice without delay of the proceedingto the attorney general who may intervene.
As added by P.L.179-1991, SEC.1. Amended by P.L.245-2005,SEC.5.
IC 23-17-24-3
Receivers and custodians
Sec. 3. (a) A court in a judicial proceeding brought by the attorneygeneral or by any other party named under section 1 of this chapterto dissolve a public benefit or mutual benefit corporation mayappoint at least one (1):
(1) receiver to wind up and liquidate; or
(2) custodian to manage;
the affairs of the corporation. The court shall hold a hearing, afternotifying all parties to the proceeding and any interested personsdesignated by the court, before appointing a receiver or custodian.The court appointing a receiver or custodian has exclusivejurisdiction over the corporation and all of the corporation's propertywherever located.
(b) The court may appoint an individual or a domestic or foreignbusiness or nonprofit corporation authorized to transact business inIndiana as a receiver or custodian. The court may require the receiveror custodian to post bond, with or without sureties, in an amount thecourt directs.
(c) The court shall describe the powers and duties of the receiveror custodian in the appointing order, which may be amended fromtime to time, including the following:
(1) The receiver may do the following:
(A) Dispose of all or any part of the assets of the corporationwherever located, at a public or private sale, if authorized bythe court. However, the corporation is subject to a trust, anendowment, and other restrictions that would be applicableto the corporation.
(B) Sue and defend in the receiver's or custodian's name asreceiver or custodian of the corporation in all Indiana courts.
(2) The custodian may exercise all of the powers of thecorporation, through or in place of the corporation's board ofdirectors or officers, to the extent necessary to manage theaffairs of the corporation in the best interests of thecorporation's members and creditors or to carry out thecorporation's lawful purposes.
(d) The court during a receivership may redesignate the receivera custodian, and during a custodianship may redesignate thecustodian a receiver if doing so is in the best interests of the
corporation and the corporation's members and creditors.
(e) The court may, during the receivership or custodianship, ordercompensation paid and expense disbursements or reimbursementsmade to the receiver or custodian and the receiver's or custodian'scounsel from the assets of the corporation or proceeds from the saleof the assets.
As added by P.L.179-1991, SEC.1. Amended by P.L.245-2005,SEC.6.
IC 23-17-24-4
Decree of dissolution; winding up affairs
Sec. 4. (a) If after a hearing the court determines that a ground forjudicial dissolution described in section 1 of this chapter exists, thecourt may enter a decree dissolving the corporation and specifyingthe effective date of the dissolution. The clerk of the court shalldeliver a certificate copy of the decree to the secretary of state, whoshall file the certificate copy.
(b) After entering the decree of dissolution, the court shall directthe winding up and liquidating of the corporation's affairs inaccordance with IC 23-17-22-5 and the notification of thecorporation's claimants under IC 23-17-22-6 and IC 23-17-22-7.
As added by P.L.179-1991, SEC.1.