(a) The court may dissolve a corporation in a proceeding by the attorney general if it is established that:

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Terms Used In Hawaii Revised Statutes 414D-252

  • articles: includes amended and restated articles of incorporation, and articles of merger. See Hawaii Revised Statutes 414D-14
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Corporation: means a nonprofit corporation unless otherwise specified. See Hawaii Revised Statutes 414D-14
  • Directors: means individuals, designated in the articles or bylaws or elected by the incorporators, and their successors and individuals elected or appointed by any other name or title, to act as members of the board. See Hawaii Revised Statutes 414D-14
  • Fraud: Intentional deception resulting in injury to another.
  • Person: includes any individual or entity. See Hawaii Revised Statutes 414D-14
  • Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Hawaii Revised Statutes 414D-14
  • Public benefit corporation: means any corporation designated by statute as a public benefit corporation, or any corporation that is recognized as exempt under section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or that is organized for public or charitable purposes and upon dissolution must distribute its assets to a public benefit corporation, the United States, a state, or a person recognized as exempt under section 501(c)(3) of the Internal Revenue Code of 1986, as amended. See Hawaii Revised Statutes 414D-14
  • Voting power: means the total number of votes entitled to be cast for the election of directors at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event that has not occurred at the time. See Hawaii Revised Statutes 414D-14
(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.

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