Massachusetts General Laws ch. 176A sec. 23 – Grounds for enjoining transaction of business; rehabilitation proceedings; duties of receiver; distribution of assets
Section 23. If the commissioner of insurance, in this section called the commissioner, is satisfied, as to any corporation subject to this chapter that (1) it has failed to comply with the provisions of its charter, or (2) it is being operated for profit, or (3) it is fraudulently conducted, or (4) its condition is such as to render its further transaction of business hazardous to the public or to its subscribers, or (5) its officers and agents have refused to submit to an examination under section six, or (6) it has exceeded its powers, or (7) it has violated any provision of law, or (8) it has compromised, or is attempting to compromise, with its creditors on the ground that it is financially unable to pay its claims in full except as authorized under hospital contracts, or (9) it is insolvent, he may apply to the supreme judicial court for an injunction restraining it from further proceeding with its business. The court may forthwith issue a temporary injunction restraining the transaction of any business, and it may, after a full hearing, make the injunction permanent, and appoint one or more receivers to take possession of the books, papers, moneys and other assets of the corporation, settle its affairs, and distribute its funds to those entitled thereto, subject to such rules and orders as the court may prescribe or the court may order that such corporation be rehabilitated as provided below in this section.
Terms Used In Massachusetts General Laws ch. 176A sec. 23
- 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.
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
The commissioner may institute a rehabilitation proceeding against any non-profit hospital service corporation for any cause specified in the preceding paragraph, by making application to the supreme judicial court for his appointment as receiver to rehabilitate such corporation and conserve its assets. The court may on such application issue a temporary injunction restraining the corporation in whole or in part from further proceeding with its business, and may appoint the commissioner as temporary receiver forthwith, and, after due notice and a full opportunity to be heard, may appoint the commissioner as permanent receiver and authorize him to take possession of all the property and effects of the corporation and to conduct its business for the purpose of rehabilitating it by taking such measures as may be proper to eliminate the causes and the conditions which caused the institution of such proceeding, subject to the order of the court, may make any other appropriate order, or may dismiss the petition.
The receiver or such corporation may at any time make application to the court for the termination of a proceeding under this section and for the return to the corporation of all its property and effects, with authority to resume the conduct of its business. The court, if satisfied after due notice and a full hearing that the purposes of the proceeding have been substantially accomplished, shall grant such application.
In any rehabilitation proceeding the court may authorize the receiver to employ such counsel and other assistants as may be necessary for the proper conduct of such proceeding. The compensation of such counsel and assistants and all other necessary expenses of conducting such proceeding shall be paid out of the funds or assets of the corporation in the possession of the receiver.
In the event of liquidation or dissolution of a non-profit hospital service corporation the assets remaining after the payment of outstanding liabilities shall be distributed equitably to the hospitals with whom the corporation has contracts, or to the subscribers, or both, as the court may order.