13.1-747 - Grounds for judicial dissolution. - Virginia Statutes

§ 13.1-747. Grounds for judicial dissolution.

A. The circuit court in any city or county described in subsection C maydissolve a corporation:

1. In a proceeding by a shareholder of a corporation that is not a publiccorporation if it is established that:

a. The directors are deadlocked in the management of the corporate affairs,the shareholders are unable to break the deadlock, and irreparable injury tothe corporation is threatened or being suffered, or the business and affairsof the corporation can no longer be conducted to the advantage of theshareholders generally, because of the deadlock; or

b. The directors or those in control of the corporation have acted, areacting, or will act in a manner that is illegal, oppressive, or fraudulent; or

c. The shareholders are deadlocked in voting power and have failed, for aperiod that includes at least two consecutive annual meeting dates, to electsuccessors to directors whose terms have expired; or

d. The corporate assets are being misapplied or wasted;

2. In a proceeding by a creditor if it is established that:

a. The creditor's claim has been reduced to judgment, the execution on thejudgment returned unsatisfied and the corporation is insolvent; or

b. The corporation has admitted in writing that the creditor's claim is dueand owing and the corporation is insolvent;

3. In a proceeding by the corporation to have its voluntary dissolutioncontinued under court supervision;

4. In a proceeding by a shareholder if the corporation has abandoned itsbusiness and has failed within a reasonable time to liquidate and distributeits assets and terminate its corporate existence;

5. Upon application by the board of directors when it is established thatcircumstances make it impossible to obtain a representative vote byshareholders on the question of dissolution and that the continuation of thebusiness of the corporation is not in the interest of the shareholders but itis in their interest that the assets and business be liquidated; or

6. When the Commission has instituted a proceeding for the involuntarytermination of corporate existence and entered an order finding that thecorporate existence of the corporation should be terminated but thatliquidation of its business and affairs should precede the entry of an orderof termination of corporate existence.

B. The circuit court in the city or county named in subsection C shall havefull power to liquidate the assets and business of the corporation at anytime after the termination of corporate existence, pursuant to the provisionsof this article upon the application of any person, for good cause, withregard to any assets or business that may remain. The jurisdiction conferredby this clause may also be exercised by any such court in any city or countywhere any property may be situated whether of a domestic or a foreigncorporation that ceased to exist.

C. Venue for a proceeding brought under this section lies in the city orcounty where the corporation's principal office is or was located, or, ifnone in the Commonwealth, where its registered office is or was last located.

D. It is not necessary to make directors or shareholders parties to aproceeding to be brought under this section unless relief is sought againstthem individually.

E. A court in a proceeding brought to dissolve a corporation may issueinjunctions, appoint a receiver or custodian pendente lite with such powersand duties as the court may direct, take other action required to preservethe corporate assets wherever located, and carry on the business of thecorporation until a full hearing can be held.

(Code 1950, § 13.1-94; 1956, c. 428; 1959, Ex. Sess., c. 57; 1968, c. 112;1985, c. 522; 2005, c. 765; 2007, c. 165.)