Louisiana Revised Statutes 12:251 – Involuntary proceedings for dissolution; grounds; institution; appointment of liquidator
Terms Used In Louisiana Revised Statutes 12:251
- Articles: means the original articles of incorporation, and all amendments thereto including those contained in merger agreements, or if restated, the latest restatement thereof, except in those instances in which the context expressly refers to the original articles of incorporation only. See Louisiana Revised Statutes 12:201
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Assets: means all of a corporation's property and rights of every kind. See Louisiana Revised Statutes 12:201
- 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.
- Court: means any court of competent jurisdiction where the registered office of the corporation is located. See Louisiana Revised Statutes 12:201
- Directors: means persons designated in the articles as such, and persons designated, elected or appointed by any other name or title to act as directors, and their successors. See Louisiana Revised Statutes 12:201
- Dismissal: The dropping of a case by the judge without further consideration or hearing. Source:
- Member: means each natural or artificial person admitted to membership in a corporation, and, unless the context indicates otherwise, includes shareholders. See Louisiana Revised Statutes 12:201
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
- Shareholder: means a natural or artificial person who is the owner of a property interest in a corporation represented by a certificate for shares of stock. See Louisiana Revised Statutes 12:201
- Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
- Voting power: means the right vested, by law or by the articles or the by-laws, in the members, or in one or more classes of members, to vote in the determination of any particular question or matter coming before meetings of the members. See Louisiana Revised Statutes 12:201
A. The court may entertain a proceeding for involuntary dissolution under its supervision when it is made to appear that:
(1) The corporate assets are insufficient to pay all just demands for which the corporation is liable, or to afford reasonable security to those who may deal with it; or
(2) The objects of the corporation have wholly failed, or are entirely abandoned, or their accomplishment is impracticable; or
(3) It is beneficial to the interests of the members that the corporation should be liquidated and dissolved; or
(4) The directors are deadlocked in the management of the corporate affairs, and the members are unable to break the deadlock; or
(5) The members are deadlocked in voting power, and have failed, for a period which includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired or would have expired upon the election of their successors; or
(6) The corporation has been guilty of gross and persistent ultra vires acts; or
(7) Judgment has been entered annulling, vacating or forfeiting the corporation’s articles and franchise in accordance with the provisions of La. Rev. Stat. 12:262; or
(8)(a) A receiver has been appointed to take charge of the corporation’s property, and either (b) there is no reasonable prospect of return of control of the corporation to its members within a reasonable time or (c) the corporation is operating at a loss and there is no reasonable prospect of restoring it to profitable operation within a reasonable time.
B. An involuntary proceeding for dissolution may be instituted against a corporation by either a member; or a creditor whose claim has been reduced to judgment, on which execution has been issued and returned “nulla bona”; or a receiver appointed to take charge of the corporation’s property.
C. If a corporation having only two shareholders, each of which owns half of the outstanding shares of each class, is engaged in the prosecution of a joint venture between the shareholders, either shareholder may, unless the articles expressly prohibit dissolution pursuant to this subsection, file a petition stating that it desires to discontinue such joint venture and to dispose of the assets used therein in accordance with a plan to be agreed upon by both shareholders. Such petition, to which shall be attached a copy of the proposed plan of discontinuance and distribution, shall be served on the corporation and on the other shareholder. Unless both shareholders file with the court (1) within three months of the date of last service of such petition, a certificate that they have agreed on such plan, or a modification thereof, and (2) within one year from the date of last service of such petition, a certificate that the distribution provided by such plan has been completed, the court may proceed with involuntary dissolution of such corporation.
D. The commencement of a proceeding for dissolution out of court shall not affect the right of any person to institute an involuntary proceeding for dissolution.
E. The court may, after trial, appoint a judicial liquidator, and may, ex parte pending trial, appoint a temporary liquidator whose authority shall cease upon appointment of a judicial liquidator, upon dismissal of the petition, or upon appointment of a receiver.
F. Unless the corporation’s articles and franchise have been annulled, vacated or forfeited, the court may, on motion of any interested party at any stage of the proceeding, appoint a receiver to take charge of the corporation’s property pursuant to La. Rev. Stat. 12:258, if the corporation is affected with the public interest, or if there is a reasonable prospect that a receiver could return control of the corporation to its shareholders as a going concern within a reasonable time.
Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §22, emerg. eff. June 18, 1970, at 5:05 P.M.