CHAPTER 24. JUDICIAL DISSOLUTION
IC 23-17-24
Chapter 24. Judicial Dissolution
IC 23-17-24-1
Judicial dissolution; when allowable; factors considered
Sec. 1. (a) A circuit court or superior court may dissolve a
corporation as follows:
(1) In a proceeding by the attorney general if one (1) of the
following is established:
(A) The corporation obtained the corporation's articles of
incorporation through fraud.
(B) The corporation has continued to exceed or abuse the
authority conferred upon the corporation by law.
(C) The corporation is a public benefit corporation and the
corporate assets are being misapplied or wasted.
(D) The corporation is a public benefit corporation and is no
longer able to carry out the corporation's purposes.
(2) Except as provided in the articles of incorporation or bylaws
of a religious corporation, in a proceeding by fifty (50)
members or members holding at least five percent (5%) of the
voting power, whichever is less, or by a director or a person
specified in articles of corporation, if one (1) of the following
is established:
(A) The directors are deadlocked in the management of the
corporate affairs, and the members, if any, are unable to
break the deadlock.
(B) 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.
(C) The members have deadlocked in voting power and have
failed, for a period that includes at least two (2) consecutive
annual meeting dates, to elect successors to directors whose
terms have, or would otherwise have, expired.
(D) The corporate assets are being misapplied or wasted.
(E) The corporation is a public benefit or religious
corporation and is no longer able to carry out the
corporation's purposes.
(3) In a proceeding by a creditor if either of the following is
established:
(A) The creditor's claim has been reduced to judgment, the
execution on the judgment returned unsatisfied, and the
corporation is insolvent.
(B) The corporation has admitted in writing that the
creditor's claim is due and owing and the corporation is
insolvent.
(4) In a proceeding by the corporation to have the corporation's
voluntary dissolution continued under court supervision.
(b) Before dissolving a corporation, a court must consider the
following:
(1) Reasonable alternatives to dissolution.
(2) If dissolution is in the public interest if the corporation is a
public benefit corporation.
(3) If dissolution is the best way of protecting the interests of
members if the corporation is a mutual benefit corporation.
As added by P.L.179-1991, SEC.1.
IC 23-17-24-1.5
Remedies
Sec. 1.5. (a) This section applies to the following:
(1) Notwithstanding IC 23-17-1-1, all corporations organized
under Indiana law for a purpose for which a corporation may be
organized under this article, regardless of the date of
incorporation.
(2) A foreign corporation that desires to transact business in
Indiana.
(b) In addition to a dissolution under section 1 of this chapter, the
attorney general may petition a court to issue one (1) or more of the
following remedies:
(1) Injunctive relief.
(2) Appointment of temporary or permanent receivers.
(3) Permanent removal of trustees, corporate officers, or
directors who have breached the fiduciary duty.
(4) Appointment of permanent court approved replacement
trustees, corporate officers or directors, and members.
(c) The attorney general may seek a remedy against any or all of
the following:
(1) If the attorney general establishes a condition enumerated in
section 1(a)(1) of this chapter, a corporation.
(2) For a violation of the officer's duties under IC 23-17-14-2,
a corporate officer.
(3) For a violation of IC 23-17-13, a corporate director.
As added by P.L.245-2005, SEC.4.
IC 23-17-24-2
Venue; parties; judicial authority; notice to attorney general
Sec. 2. (a) Venue for a proceeding brought by the attorney general
against a corporation or its officers or directors lies in Marion
County. Venue for a proceeding brought by any other party named
under section 1 of this chapter lies in the county where:
(1) a corporation's principal office is or was last located; or
(2) if the principal office is not located in Indiana, the
corporation's registered office is or was last located.
(b) A director or a member does not have to be made a party to a
proceeding to dissolve a corporation unless relief is sought against
a director or a member individually.
(c) A court in a proceeding brought to dissolve a corporation may
do the following:
(1) Issue injunctions.
(2) Appoint a receiver or custodian pendente lite with all
powers and duties the court directs.
(3) Take other action required to preserve the corporate assets
wherever located.
(4) Carry on the activities of the corporation until a full hearing
can be held.
(d) A person other than the attorney general who brings an
involuntary dissolution proceeding for a public benefit or religious
corporation shall give written notice without delay of the proceeding
to the attorney general who may intervene.
As added by P.L.179-1991, SEC.1. Amended by P.L.245-2005,
SEC.5.
IC 23-17-24-3
Receivers and custodians
Sec. 3. (a) A court in a judicial proceeding brought by the attorney
general or by any other party named under section 1 of this chapter
to dissolve a public benefit or mutual benefit corporation may
appoint at least one (1):
(1) receiver to wind up and liquidate; or
(2) custodian to manage;
the affairs of the corporation. The court shall hold a hearing, after
notifying all parties to the proceeding and any interested persons
designated by the court, before appointing a receiver or custodian.
The court appointing a receiver or custodian has exclusive
jurisdiction over the corporation and all of the corporation's property
wherever located.
(b) The court may appoint an individual or a domestic or foreign
business or nonprofit corporation authorized to transact business in
Indiana as a receiver or custodian. The court may require the receiver
or custodian to post bond, with or without sureties, in an amount the
court directs.
(c) The court shall describe the powers and duties of the receiver
or custodian in the appointing order, which may be amended from
time to time, including the following:
(1) The receiver may do the following:
(A) Dispose of all or any part of the assets of the corporation
wherever located, at a public or private sale, if authorized by
the court. However, the corporation is subject to a trust, an
endowment, and other restrictions that would be applicable
to the corporation.
(B) Sue and defend in the receiver's or custodian's name as
receiver or custodian of the corporation in all Indiana courts.
(2) The custodian may exercise all of the powers of the
corporation, through or in place of the corporation's board of
directors or officers, to the extent necessary to manage the
affairs of the corporation in the best interests of the
corporation's members and creditors or to carry out the
corporation's lawful purposes.
(d) The court during a receivership may redesignate the receiver
a custodian, and during a custodianship may redesignate the
custodian a receiver if doing so is in the best interests of the
corporation and the corporation's members and creditors.
(e) The court may, during the receivership or custodianship, order
compensation paid and expense disbursements or reimbursements
made to the receiver or custodian and the receiver's or custodian's
counsel from the assets of the corporation or proceeds from the sale
of the assets.
As added by P.L.179-1991, SEC.1. Amended by P.L.245-2005,
SEC.6.
IC 23-17-24-4
Decree of dissolution; winding up affairs
Sec. 4. (a) If after a hearing the court determines that a ground for
judicial dissolution described in section 1 of this chapter exists, the
court may enter a decree dissolving the corporation and specifying
the effective date of the dissolution. The clerk of the court shall
deliver a certificate copy of the decree to the secretary of state, who
shall file the certificate copy.
(b) After entering the decree of dissolution, the court shall direct
the winding up and liquidating of the corporation's affairs in
accordance with IC 23-17-22-5 and the notification of the
corporation's claimants under IC 23-17-22-6 and IC 23-17-22-7.
As added by P.L.179-1991, SEC.1.