ORS 65.661
Grounds for judicial dissolution
(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 exceeded or abused the authority conferred upon the corporation by law;(C)
The corporation has fraudulently solicited money or has fraudulently used the money solicited;(D)
The corporation is a public benefit corporation and the corporate assets are being misapplied or wasted;(E)
The corporation is a public benefit corporation and is no longer able to carry out the public benefit corporation’s purposes or the Internal Revenue Service has revoked the public benefit corporation’s tax exempt status; or(F)
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 65.771 (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 contract 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)
Except as provided in the articles of incorporation or bylaws of a religious corporation, in a proceeding by 50 members or members holding five percent or more of the voting power, whichever is less, or by a director or any person specified in the articles of incorporation, if the court finds that:(A)
The directors are deadlocked in the management of the corporate affairs, and the members, if any, are unable to break 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 expired;(D)
The corporate assets are being misapplied or wasted; or(E)
The corporation is a public benefit corporation or religious corporation and is no longer able to carry out the public benefit corporation’s or religious corporation’s purposes;(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 has been 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(d)
In a proceeding by the corporation to have the corporation’s voluntary dissolution continued under court supervision.(2)
Before dissolving a corporation, the court shall consider whether:(a)
Reasonable alternatives to dissolution exist;(b)
Dissolution is in the public interest, if the corporation is a public benefit corporation; or(c)
Dissolution is the best way of protecting the interests of members, if the corporation is a mutual benefit corporation.(3)
In addition to subjecting a corporation to dissolution under subsection (1)(a)(F) 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.(4)
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. [1989 c.1010 §142; 2019 c.174 §95]
Source:
Section 65.661 — Grounds for judicial dissolution, https://www.oregonlegislature.gov/bills_laws/ors/ors065.html.
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