Jurisdiction of court to liquidate assets and business of corporation.
R.I. Gen. Laws § 7-1.2-1314
in effect7-1.2-1314. Jurisdiction of court to liquidate assets and business of corporation.
(a) The superior court has full power to liquidate the assets and business of a corporation:
(1) In an action by a shareholder when it is established that, whether or not the corporate
business has been or could be operated at a profit, dissolution would be beneficial
to the shareholders because:
(i) The directors or those other individuals who may be responsible for management pursuant
to § 7-1.2-1701(a) are deadlocked in the management of the corporate affairs and the shareholders are
unable to break the deadlock; or
(ii) The acts of the directors or those in control of the corporation are illegal, oppressive,
or fraudulent; or
(iii) The shareholders are deadlocked in voting power, and have failed, for a period which
includes at least two (2) consecutive annual meeting dates, to elect successors to
directors whose terms have expired or would have expired upon the election and qualification
of their successors; or
(iv) The corporate assets are being misapplied or are in danger of being wasted or lost;
or
(v) Two (2) or more factions of shareholders are divided and there is such internal dissension
that serious harm to the business and affairs of the corporation is threatened; or
(vi) The holders of one-half (½) or more of all the outstanding shares of the corporation
have voted to dissolve the corporation;
(2)(i) In an action by a creditor:
(A) When it is established that the corporation is insolvent; or
(B) When it is established that the corporate assets are being misapplied or are in danger
of being wasted or lost.
(ii) If it is established that the claim of a creditor has been reduced to judgment and
an execution on the judgment returned unsatisfied or that a corporation has admitted,
in writing, that the claim of a creditor is due and owing, the establishment of the
facts are prima facie evidence of insolvency.
(iii) Every petition filed by a creditor for the liquidation of the assets and business
of a corporation must contain a statement as to whether the creditor is or is not
an officer, director, or shareholder of the corporation. Every petition for the liquidation
of the assets and business of a corporation filed by an officer, director, or shareholder
of a corporation or by a creditor who is an officer, director or shareholder, must
contain, to the best of petitioner’s knowledge, information, and belief, the names
and addresses of all known creditors of any class of the corporation.
(3) When an action has been filed by the attorney general to dissolve a corporation and
it is established that liquidation of its business and affairs should precede the
entry of a decree of dissolution.
(b) Proceedings under subsections (a)(1) or (a)(2) should be brought in the county in
which the registered or principal office of the corporation is situated.
(c) It is not necessary to make shareholders parties to any action or proceeding unless
relief is sought against them personally.
P.L. 2004, ch. 216, § 2; P.L. 2004, ch. 274, § 2; P.L. 2005, ch. 120, § 1; P.L. 2005,
ch. 130, § 1.
Source: State of Rhode Island General Assembly (rilegislature.gov)URL: https://webserver.rilegislature.gov/Statutes/TITLE7/7-1.2/7-13/7-1.2-1314.htmFetched: 10/20/2026