Termination of corporate status

Question 1

Voluntary dissolution

Answer 1

1. Procedure after issuance of stock—BD adopts a proposal for the dissolution of C and a majority of SHs approve
2. Winding up—dissolving C can continue to exist to collect assets, dispose of property not distributed to SHs, discharge liabilities, and distribute property among SHs according to their interests

Question 2

Involuntary dissolution

Answer 2

1. Creditors can pursue involuntary dissolution only for an insolvent C
2. SHs can pursue involuntary dissolution if C’s assets are being misapplied/wasted, Ds are acting illegally/oppressively/fraudulently, SHs are unable to break Ds deadlock causing irreparable injury, or if the SHs are deadlocked and fail to elect successor Ds
3. Oppression doctrine—doctrine of SH oppression protects minority from oppressive majority control; statutory provisions regarding involuntary dissolution are interpreted to protect the reasonable expectations of SHs