APPOINTMENT OF CUSTODIAN OR RECEIVER OF CORPORATION

ON DEADLOCK OR FOR OTHER CAUSE

A. The district court, upon application of any shareholder, may appoint one or more persons to be custodians, and, if the corporation is insolvent, to be receivers, of and for any corporation when:

1. At any meeting held for the election of directors the shareholders are so divided that they have failed to elect successors to directors whose terms have expired or would have expired upon qualification of their successors;

2. The business of the corporation is suffering or is threatened with irreparable injury because the directors are so divided respecting the management of the affairs of the corporation that the required vote for action by the board of directors cannot be obtained and the shareholders are unable to terminate this division; or

3. The corporation has abandoned its business and has failed within a reasonable time to take steps to dissolve, liquidate or distribute its assets.

B. A custodian appointed pursuant to the provisions of this section shall have all the powers and title of a receiver appointed by the court under applicable law, but the authority of the custodian is to continue the business of the corporation and not to liquidate its affairs and distribute its assets, except when the court shall otherwise order and except in cases arising pursuant to paragraph 3 of subsection A of this section.

C. In the case of a charitable nonstock corporation, the applicant shall provide a copy of any application referred to in subsection A of this section to the Attorney General of this state within one (1) week of its filing with the district court.

Added by Laws 1986, c. 292, § 71, eff. Nov. 1, 1986. Amended by Laws 2019, c. 88, § 12, eff. Nov. 1, 2019.