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]
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.