Judicial Dissolution

V.S.A. tit. 11B, ch. 14, subch. 3

in effect

11B V.S.A. § 14.30 Grounds for judicial dissolution

14.30. Grounds for judicial dissolution (a) The Superior Court may dissolve a corporation: (1) in a proceeding by the Attorney General if it is established that: (A) the corporation obtained its articles of incorporation through fraud; (B) the corporation has continued to exceed or abuse the authority conferred upon it by law; (C) the corporation is a public benefit corporation and the corporate assets are being misapplied or wasted; or (D) the corporation is a public benefit corporation and is no longer able to carry out its purposes; (2) in a proceeding by 50 members or members holding five percent of the voting power, whichever is less, or by a director or any person specified in the articles, if it is established that: (A) the directors are deadlocked in the management of the corporate affairs, and the members, if any, are unable to breach 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 members 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, or would otherwise have, expired; (D) the corporate assets are being misapplied or wasted; or (E) the corporation is a public benefit corporation and is no longer able to carry out its purposes; (3) in a proceeding by a creditor if it is established 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; or (4) in a proceeding by the corporation to have its voluntary dissolution continued under court supervision. (b) Prior to dissolving a corporation, the court shall consider whether: (1) there are reasonable alternatives to dissolution; (2) dissolution is in the public interest, if the corporation is a public benefit corporation; (3) dissolution is the best way of protecting the interests of members, if the corporation is a mutual benefit corporation. Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.

11B V.S.A. § 14.31 Procedure for judicial dissolution

14.31. Procedure for judicial dissolution (a) Venue for a proceeding by the Attorney General to dissolve a corporation lies in the Superior Court of Washington County. Venue for a proceeding brought by any other party named in section 14.30 of this title lies in the county where a corporation’s principal office (or, if none in this State, its registered office) is or was last located. (b) It is not necessary to make directors or members parties to a proceeding to dissolve a corporation unless relief is sought against them individually. (c) A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian pendente lite with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the activities of the corporation until a full hearing can be held. (d) A person other than the Attorney General who brings an involuntary dissolution proceeding for a public benefit corporation shall forthwith give written notice of the proceeding to the Attorney General who may intervene. Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.

11B V.S.A. § 14.32 Receivership or custodianship

14.32. Receivership or custodianship (a) A court in a judicial proceeding brought to dissolve a corporation may appoint one or more receivers to wind up and liquidate, or one or more custodians to manage, the affairs of the corporation. The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian. The court appointing a receiver or custodian has exclusive jurisdiction over the corporation and all of its property wherever located. (b) The court may appoint an individual, or a domestic or foreign business or nonprofit corporation (authorized to transact business in this state) as a receiver or custodian. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs. (c) The court shall describe the powers and duties of the receiver or custodian in its appointing order, which may be amended from time to time. Among other powers: (1) the receiver: (A) may dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court; provided, however, that the receiver’s power to dispose of the assets of the corporation is subject to any trust and other restrictions that would be applicable to the corporation; and (B) may sue and defend in the receiver’s or custodian’s name as receiver or custodian of the corporation in all courts of this State; (2) the custodian may exercise all of the powers of the corporation, through or in place of its board of directors or officers, to the extent necessary to manage the affairs of the corporation in the best interests of its members and creditors. (d) The court during a receivership may redesignate the receiver a custodian, and during a custodianship may redesignate the custodian a receiver, if doing so is in the best interests of the corporation, its members, and creditors. (e) The court from time to time during the receivership or custodianship may order compensation paid and expense disbursements or reimbursements made to the receiver or custodian and the receiver’s or custodian’s counsel from the assets of the corporation or proceeds from the sale of the assets. Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.

11B V.S.A. § 14.33 Decree of dissolution

14.33. Decree of dissolution (a) If after a hearing the court determines that one or more grounds for judicial dissolution described in section 14.30 of this title exist, it may enter a decree dissolving the corporation and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the decree to the Secretary of State, who shall file it. (b) After entering the decree of dissolution, the court shall direct the winding up and liquidation of the corporation’s affairs in accordance with section 14.05 of this title and the notification of its claimants in accordance with sections 14.06 and 14.07 of this title. Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/11B/014Fetched: 10/21/2026