16-6a-1414 - Grounds for judicial dissolution.
16-6a-1414. Grounds for judicial dissolution.
(1) A nonprofit corporation may be dissolved in a proceeding by the attorney general orthe division director if it is established that:
(a) the nonprofit corporation obtained its articles of incorporation through fraud; or
(b) the nonprofit corporation has continued to exceed or abuse the authority conferredupon it by law.
(2) A nonprofit corporation may be dissolved in a proceeding by a member or director ifit is established that:
(a) (i) the directors are deadlocked in the management of the corporate affairs;
(ii) the members, if any, are unable to break the deadlock; and
(iii) irreparable injury to the nonprofit corporation is threatened or being suffered;
(b) the directors or those in control of the nonprofit corporation have acted, are acting, orwill act in a manner that is illegal, oppressive, or fraudulent;
(c) the members are deadlocked in voting power and have failed, for a period thatincludes at least two consecutive annual meeting dates, to elect successors to directors whoseterms have expired or would have expired upon the election of their successors; or
(d) the corporate assets are being misapplied or wasted.
(3) A nonprofit corporation may be dissolved in a proceeding by a creditor if it isestablished that:
(a) (i) the creditor's claim has been reduced to judgment;
(ii) the execution on the judgment has been returned unsatisfied; and
(iii) the nonprofit corporation is insolvent; or
(b) (i) the nonprofit corporation is insolvent; and
(ii) the nonprofit corporation has admitted in writing that the creditor's claim is due andowing.
(4) (a) If a nonprofit corporation has been dissolved by voluntary or administrative actiontaken under this part:
(i) the nonprofit corporation may bring a proceeding to wind up and liquidate its businessand affairs under judicial supervision in accordance with Section 16-6a-1405; and
(ii) the attorney general, a director, a member, or a creditor may bring a proceeding towind up and liquidate the affairs of the nonprofit corporation under judicial supervision inaccordance with Section 16-6a-1405, upon establishing the grounds set forth in Subsections (1)through (3).
(b) As used in Sections 16-6a-1415 through 16-6a-1417:
(i) a "judicial proceeding to dissolve the nonprofit corporation" includes a proceedingbrought under this Subsection (4); and
(ii) a "decree of dissolution" includes an order of a court entered in a proceeding underthis Subsection (4) that directs that the affairs of a nonprofit corporation shall be wound up andliquidated under judicial supervision.
Enacted by Chapter 300, 2000 General Session