378.630. Powers of director to order changes, when--may enjoin further business, when, duration--liquidation, effect. - Missouri Statutes

Powers of director to order changes, when--may enjoin furtherbusiness, when, duration--liquidation, effect.

378.630. 1. When the director upon investigation findsthat a domestic society:

(1) Has exceeded its powers;

(2) Has failed to comply with any provision of thischapter;

(3) Is not fulfilling its contracts in good faith;

(4) Has a membership of less than four hundred after anexistence of one year or more; or

(5) Is conducting business fraudulently or in a mannerhazardous to its members, creditors, the public or the business,

the director shall notify the society of such deficiency ordeficiencies and state in writing the reasons for hisdissatisfaction. The director shall at once issue a writtennotice to the society requiring that the deficiency ordeficiencies which exist are corrected. After such notice thesociety shall have a thirty-day period in which to comply withthe director's request for correction, and if the society failsto comply, the director shall notify the society of such findingsof noncompliance and require the society to show cause on a datenamed why it should not be enjoined from carrying on any businessuntil the violation complained of shall have been corrected, orwhy an action in quo warranto should not be commenced against thesociety.

2. If on such date the society does not present good andsufficient reasons why it should not be so enjoined or why suchaction should not be commenced, the director may commence anaction to enjoin the society from transacting business or in quowarranto.

3. The court shall thereupon notify the officers of thesociety of a hearing. If after a full hearing it appears thatthe society should be so enjoined or liquidated or a receiverappointed, the court shall enter the necessary order. No societyso enjoined shall have the authority to do business until:

(1) The director finds that the violation complained of hasbeen corrected;

(2) The costs of such action shall have been paid by thesociety if the court finds that the society was in default ascharged;

(3) The court has dissolved its injunction; and

(4) The director has reinstated the certificate ofauthority.

4. If the court orders the society liquidated, it shall beenjoined from carrying on any further business, whereupon thereceiver of the society shall proceed at once to take possessionof the books, papers, money and other assets of the society and,under the direction of the court, proceed forthwith to close theaffairs of the society and to distribute its funds to thoseentitled thereto, as provided by sections 375.1150 to 375.1246,RSMo.

5. The provisions of this section relating to hearing bythe director, hearing by the court, injunction and receivershipshall be applicable to a society which shall voluntarilydetermine to discontinue business.

(L. 1992 S.B. 831)

Effective 1-1-93