(a)  The superior court has full power to liquidate the assets and affairs of a corporation:

(1)  In an action by a member or director when it is made to appear:

(i)  That the directors are deadlocked in the management of the corporate affairs and that irreparable injury to the corporation is being suffered or is threatened because of the deadlock, and either that the members are unable to break the deadlock or there are no members having voting rights;

(ii)  That the acts of the directors or those in control of the corporation are illegal, oppressive, or fraudulent;

(iii)  That the members entitled to vote in the election of directors are deadlocked in voting power and have failed for at least two (2) years to elect successors to directors whose terms have expired or would have expired upon the election of their successors;

(iv)  That the corporate assets are being misapplied or wasted; or

(v)  That the corporation is unable to carry out its purposes;

(2)  In an action by a creditor:

(i)  When the claim of the creditor has been reduced to judgment and an execution on it has been returned unsatisfied and it is established that the corporation is insolvent; or

(ii)  When the corporation has admitted in writing that the claim of the creditor is due and owing and it is established that the corporation is insolvent;

(3)  Upon application by a corporation to have its dissolution continued under the supervision of the court;

(4)  When the corporation’s certificate of incorporation is subject to revocation by the secretary of state and it is established that liquidation of its affairs should precede the issuance of a certificate of revocation.

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Terms Used In Rhode Island General Laws 7-6-60

  • 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.
  • Director: means a member of a board of directors. See Rhode Island General Laws 7-6-2
  • in writing: include printing, engraving, lithographing, and photo-lithographing, and all other representations of words in letters of the usual form. See Rhode Island General Laws 43-3-16
  • Insolvent: means inability of a corporation to pay its debts as they become due in the usual course of its affairs. See Rhode Island General Laws 7-6-2
  • Member: means one having membership rights in a corporation in accordance with the provisions of its articles of incorporation or bylaws regardless of the name by which the person is designated. See Rhode Island General Laws 7-6-2

(b)  Proceedings under this section shall be brought in the county in which the registered office or the principal office of the corporation is situated.

(c)  It is not necessary to make directors or members parties to any action or proceedings unless relief is sought against them personally.

History of Section.
P.L. 1984, ch. 380, § 1; P.L. 1984, ch. 444, § 1; P.L. 2018, ch. 346, § 6.