PRINTER'S NO. 865
No. 796 Session of 1999
INTRODUCED BY O'PAKE, BODACK, WAGNER, COSTA, MUSTO, STAPLETON,
KASUNIC AND MELLOW, APRIL 12, 1999
REFERRED TO JUDICIARY, APRIL 12, 1999
AN ACT
1 Amending Title 15 (Corporations and Unincorporated Associations)
2 of the Pennsylvania Consolidated Statutes, further providing
3 for applications for involuntary winding up and dissolution.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Sections 1767(a) and 1981(a) of Title 15 of the
7 Pennsylvania Consolidated Statutes are amended to read:
8 § 1767. Appointment of custodian of corporation on deadlock or
9 other cause.
10 (a) General rule.--Except as provided in subsection (b),
11 upon application of any shareholder, the court may appoint one
12 or more persons to be custodians of and for any business
13 corporation when it is made to appear that:
14 (1) at any meeting for the election of directors, the
15 shareholders are so divided that they have failed to elect
16 successors to directors whose terms have expired or would
17 have expired upon the qualification of their successors;
18 (2) in the case of a closely held corporation, the
1 directors or those in control of the corporation have acted
2 illegally, oppressively or fraudulently toward one or more
3 holders or owners of 5% or more of the outstanding shares of
4 any class of the corporation in their capacities as
5 shareholders, directors, officers or employees; or
6 (3) the conditions specified in section 1981(a)(1), (2)
7 or (3) (relating to proceedings upon application of
8 shareholder [or], director or Attorney General), other than
9 that it is beneficial to the interests of the shareholders
10 that the corporation be wound up and dissolved, exist with
11 respect to the corporation.
12 * * *
13 § 1981. Proceedings upon application of shareholder [or],
14 director or Attorney General.
15 (a) General rule.--Upon application filed by a shareholder
16 [or], director of a business corporation or the Attorney General
17 of the Commonwealth, the court may entertain proceedings for the
18 involuntary winding up and dissolution of the corporation when
19 any one of the following is made to appear:
20 (1) The acts of the directors, or those in control of
21 the corporation, are illegal, oppressive or fraudulent and
22 that it is beneficial to the interests of the shareholders
23 that the corporation be wound up and dissolved.
24 (2) The corporate assets are being misapplied or wasted
25 and that it is beneficial to the interests of the
26 shareholders that the corporation be wound up and dissolved.
27 (3) The directors are deadlocked in the direction of the
28 management of the business and affairs of the corporation and
29 the shareholders are unable to break the deadlock and that
30 irreparable injury to the corporation is being suffered or is
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1 threatened by reason thereof. The court shall not appoint a
2 receiver or grant other similar relief under this paragraph
3 if the shareholders by agreement or otherwise have provided
4 for the appointment of a provisional director or other means
5 for the resolution of a deadlock but the court shall enforce
6 the remedy so provided if appropriate.
7 (4) The directors, managers, shareholders or those in
8 control of the corporation have actual or constructive
9 knowledge of acts of the corporation's agents which are
10 illegal, oppressive or fraudulent or constitute coercive
11 telemarketing practices.
12 * * *
13 Section 2. This act shall take effect in 60 days.
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