ORS 60.661
Grounds for judicial dissolution

  • finding that corporation is shell entity
  • prima facie showing by Attorney General
  • effects
  • affirmative defenses

(1)

A circuit court may dissolve a corporation:

(a)

In a proceeding by the Attorney General if the court finds that:

(A)

The corporation filed articles of incorporation with fraudulent intent, with fraudulent information or in a manner that otherwise indicates fraud;

(B)

The corporation has continued to exceed or abuse the authority conferred upon the corporation by law; or

(C)

The corporation is a shell entity. For purposes of this subparagraph:
(i)
A court may find that a corporation is a shell entity if the court determines that the corporation was used or incorporated for an illegal purpose, was used or incorporated to defraud or deceive a person or a governmental agency or was used or incorporated to fraudulently conceal any business activity from another person or a governmental agency; and
(ii)
The Attorney General may make a prima facie showing that a corporation is a shell entity by stating in an affidavit that:

(I)

The corporation did not provide a name or address required by the Secretary of State, or the name or address the corporation provided was false, fraudulent or inadequate;

(II)

The corporation’s articles of incorporation, a record the corporation must keep under ORS 60.771 (Corporate records), or the corporation’s annual report is false, fraudulent or inadequate;

(III)

A public body, as defined in ORS 174.109 (“Public body” defined), attempted to communicate with, or serve legal process upon, the corporation at the address or by means of other contact information the corporation provided to the Secretary of State, but the corporation failed to respond; or

(IV)

The Attorney General has other evidence that shows that the corporation was used or incorporated for an illegal purpose, was used or incorporated to defraud or deceive a person or a governmental agency or was used or incorporated to fraudulently conceal any business activity from another person or a governmental agency.

(b)

In a proceeding by a shareholder in a corporation that has shares that are listed on a national securities exchange or that are regularly traded in a market maintained by one or more members of a national or affiliated securities association, if the court finds that:

(A)

The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock and irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally, because of 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 shareholders are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired; or

(D)

The corporate assets are being misapplied or wasted.

(c)

In a proceeding by a creditor if the court finds that:

(A)

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

(B)

The corporation has admitted in writing that the creditor’s claim is due and owing and the corporation is insolvent.

(d)

In a proceeding by the corporation to have the corporation’s voluntary dissolution continued under court supervision.

(2)

In addition to subjecting a corporation to dissolution under subsection (1)(a)(C) of this section, a finding that a corporation is a shell entity has the following effects:

(a)

A court may rebuttably presume that the corporation’s filings with the Secretary of State constitute a false claim, as defined in ORS 180.750 (Definitions), in any action the Attorney General brings against the corporation under ORS 180.760 (Civil action for violation) and may award to the Attorney General reasonable attorney fees and the costs of investigation, preparation and litigation if the Attorney General prevails in the action; and

(b)

A public body, as defined in ORS 174.109 (“Public body” defined), in any proceeding against the corporation, may move to enjoin a director, officer or other person that exercises significant direction or control over the corporation from engaging in commercial activity in this state, including but not limited to incorporating or organizing an entity in this state.

(3)

A corporation may affirmatively defend against an allegation that the corporation is a shell entity by showing that the corporation, within 60 days after receiving a request to provide or correct a name, address or other information required for a filing or in articles of incorporation, a record the corporation must keep or an annual report, or within 60 days after the date of a request to respond to a communication or service of process, provided or corrected the name, address or other information or responded to the communication or service of process. [1987 c.52 §150; 2001 c.315 §58; 2017 c.705 §15]

Source: Section 60.661 — Grounds for judicial dissolution; finding that corporation is shell entity; prima facie showing by Attorney General; effects; affirmative defenses, https://www.­oregonlegislature.­gov/bills_laws/ors/ors060.­html.

Notes of Decisions

Under former similar statute (ORS 57.595)

In suit for oppressive conduct, court may consider equitable remedies as alternative to dissolution of corporation. Baker v. Commercial Body Builders, Inc., 264 Or 614, 507 P2d 387 (1973)

In general

For purposes of appellate review, judicial dissolution proceeding is equitable in nature. G.I. Joe’s, Inc. v. Nizam, 183 Or App 116, 50 P3d 1282 (2002)

Law Review Citations

In general

71 OLR 631 (1992); 36 WLR 361 (2000)

60.001
Definitions
60.004
Filing requirements
60.007
Filing, service, copying and certification fees
60.011
Effective time and date of document
60.014
Correcting filed document
60.016
Forms
60.017
Filing duty of Secretary of State
60.021
Appeal from Secretary of State’s refusal to file document
60.024
Evidentiary effect of copy of filed document
60.027
Certificate of existence or authorization
60.031
Powers
60.032
Investigations of violations of chapter
60.034
Notice
60.044
Incorporators
60.047
Articles of incorporation
60.051
Incorporation
60.054
Liability for preincorporation transactions
60.057
Organization of corporation
60.061
Bylaws
60.064
Emergency bylaws
60.074
Purposes
60.077
General powers
60.081
Emergency powers
60.084
Challenges to validity of corporate acts
60.094
Corporate name
60.097
Reserved name
60.101
Registered name
60.111
Registered office and registered agent
60.114
Change of registered office or registered agent
60.117
Resignation of registered agent
60.121
Service on corporation
60.131
Authorized shares
60.134
Terms of class or series determined by board of directors
60.137
Issued and outstanding shares
60.141
Fractional shares
60.144
Subscription for shares before incorporation
60.147
Issuance of shares
60.151
Liability of shareholders
60.154
Share dividends
60.157
Share rights, options, warrants and other equity compensation
60.161
Form and content of certificates
60.164
Shares without certificates
60.167
Restriction on transfer of shares and other securities
60.171
Expense of issue
60.174
Preemptive rights of shareholders
60.177
Corporation’s acquisition of its own shares
60.181
Distributions to shareholders
60.201
Annual meeting
60.204
Special meeting
60.207
Court-ordered meeting
60.209
Meeting chairperson
60.211
Action without meeting
60.214
Notice of meeting
60.217
Waiver of notice
60.219
Adjournment of meeting
60.221
Record date
60.222
Participation at meeting
60.223
Meeting inspectors
60.224
Shareholders’ list for meeting
60.227
Voting entitlement of shares
60.231
Proxies
60.234
Shares held by nominees
60.237
Corporations’ acceptance or rejection of votes, consents, waivers or proxy authorizations
60.241
Quorum and voting requirements for voting groups
60.244
Action by single and multiple voting groups
60.247
Modification of quorum or voting requirements
60.251
Voting for directors
60.254
Voting trusts
60.257
Voting agreements
60.261
Derivative proceedings
60.265
Validity of shareholder agreements inconsistent with chapter
60.270
Definitions for ORS 60.270 to 60.291
60.273
Defective corporate action
60.276
Ratification by board of directors
60.279
Quorum
60.282
Notice of ratification by board of directors
60.285
Corrected corporate action
60.288
Articles of validation
60.291
Judicial review of corporate action
60.301
Requirement for and duties of board of directors
60.304
Qualifications of directors
60.307
Number and election of directors
60.311
Election of directors by certain classes of shareholders
60.314
Terms of directors generally
60.317
Staggered terms for directors
60.321
Resignation of directors
60.324
Removal of directors by shareholders
60.327
Removal of directors by judicial proceeding
60.331
Vacancy on board
60.334
Compensation of directors
60.337
Meetings
60.341
Action without meeting
60.344
Notice of meeting
60.347
Waiver of notice
60.351
Quorum and voting
60.354
Committees
60.357
General standards for directors
60.361
Conflict of interest
60.364
Loans to directors
60.367
Liability for unlawful distributions
60.371
Required officers
60.374
Duties of officers
60.377
Standard of conduct for officers
60.381
Resignation and removal of officers
60.384
Contract right of officers
60.387
Definitions for ORS 60.387 to 60.414
60.391
Authority to indemnify directors
60.394
Mandatory indemnification
60.397
Payment of director’s expenses in connection with proceeding
60.401
Court-ordered indemnification
60.404
Determination and authorization of indemnification
60.407
Indemnification of officers, employees and agents
60.411
Insurance
60.414
Application of ORS 60.387 to 60.411
60.431
Authority
60.434
Amendment by board of directors
60.437
Amendment by board of directors and shareholders
60.441
Voting on amendments by voting groups
60.444
Amendment before issuance of shares
60.447
Articles of amendment
60.451
Restated articles of incorporation
60.454
Amendment pursuant to reorganization
60.457
Effect of amendment
60.461
Amendment or repeal by board of directors or shareholders
60.464
Bylaw increasing quorum or voting requirement for shareholders
60.467
Bylaw increasing quorum or voting requirement for directors
60.470
Definitions for ORS 60.470 to 60.501
60.472
Conversion
60.474
Action on plan of conversion
60.476
Articles and plan of conversion
60.478
Effect of conversion
60.481
Merger
60.484
Share exchange
60.487
Action on plan of merger or share exchange
60.491
Merger with subsidiary
60.494
Articles and plan of merger or share exchange
60.497
Effect of merger or share exchange
60.501
Merger or share exchange with foreign corporation
60.531
Sale of assets in regular course of business
60.534
Sale of assets other than in regular course of business
60.551
Definitions for ORS 60.551 to 60.594
60.554
Right to dissent
60.557
Dissent by nominees and beneficial owners
60.561
Notice of dissenters’ rights
60.564
Notice of intent to demand payment
60.567
Dissenters’ notice
60.571
Duty to demand payment
60.574
Share restrictions
60.577
Payment
60.581
Failure to take action
60.584
After-acquired shares
60.587
Procedure if shareholder dissatisfied with payment or offer
60.591
Court action
60.594
Court costs and counsel fees
60.621
Dissolution by incorporators or initial directors
60.624
Voluntary dissolution by consent of shareholders
60.627
Dissolution by board of directors and shareholders
60.631
Articles of dissolution
60.634
Revocation of dissolution
60.637
Effect of dissolution
60.641
Known claims against dissolved corporation
60.644
Unknown claims against dissolved corporation
60.645
Enforcement of claims against dissolved corporation
60.647
Grounds for administrative dissolution
60.651
Procedure
60.654
Reinstatement following administrative dissolution
60.657
Appeal from denial of reinstatement
60.661
Grounds for judicial dissolution
60.664
Procedure for judicial dissolution
60.667
Receivership or custodianship
60.671
Judgment of dissolution
60.674
Asset distribution
60.701
Authority to transact business required
60.704
Consequences of transacting business without authority
60.707
Application for authority to transact business
60.711
Amendment to application for authority
60.714
Effect of authority
60.717
Corporate name of foreign corporation
60.721
Registered office and registered agent of foreign corporation
60.724
Change of registered office or registered agent of foreign corporation
60.727
Resignation of registered agent of foreign corporation
60.731
Service on foreign corporation
60.734
Withdrawal of foreign corporation
60.737
Grounds for revocation
60.741
Procedure for and effect of revocation
60.744
Appeal from revocation
60.747
Reinstatement of authority
60.750
Definitions for ORS 60.750 to 60.770
60.752
Application of benefit company laws
60.754
Status as benefit company
60.756
Minimum status vote required to approve certain actions
60.758
Benefit company purposes and powers
60.760
Duties of, standard of conduct for and liabilities of governor of benefit company
60.762
Benefit company board of governors
60.764
Duties of, standard of conduct for and liabilities of officers and managers of benefit company
60.766
Proceedings against benefit company
60.768
Benefit report
60.770
Assessment of public benefit
60.771
Corporate records
60.774
Inspection of records by shareholders
60.777
Scope of inspection right
60.781
Court-ordered inspection
60.784
Reports to shareholders of indemnification
60.787
Annual report
60.801
Definitions for ORS 60.801 to 60.816
60.804
Applicability of ORS 60.801 to 60.816
60.807
Voting rights of control shares
60.810
Acquiring person statement
60.813
Dissenters’ rights
60.816
Short title
60.825
Definitions for ORS 60.825 to 60.845
60.830
Ownership of shares
60.835
Prohibited business combinations
60.840
Exceptions to ORS 60.835
60.845
Greater vote of shareholders prohibited
60.951
Short title
60.952
Court proceeding by shareholder in close corporation
60.954
Reservation of power to amend or repeal
60.957
Application to existing domestic corporation
60.961
Application to qualified foreign corporations
60.964
Saving provisions
60.967
Corporations incorporated under special acts
60.971
Severability
60.992
Penalty for signing false document
60.994
Liability for certain actions in connection with operation of shell entity
Green check means up to date. Up to date