CHAPTER 112

An Act to amend and reenact § 13.1-94 of the Code of Virginia, as amended,
relating to the liquidation of assets and business of a Virginia stock
corporation or to the appointment of a custodian therefor. CH 94]

Approved March 4, 1968

Be it enacted by the General Assembly of Virginia:

1. That § 13.1-94, as amended, of the Code of Virginia be amended and
reenacted as follows:

§ 13.1-94. Jurisdiction of court to liquidate assets and business of
a corporation or appoint a custodian.—Any court of record, with general
equity jurisdiction in the city or county where the registered office or
principal office of a corporation is located, shall have full power to liqui-
date the assets and business of the corporation and, but only in the case
of either subparagraph (a) or (b) below and where the court also finds
that it would be in the best interests of both the creditors and stock-
holders of the corporation, to appoint one or more persons to be cus-
todians of such corporation with authority to continue the business of
the corporation, with full authority to declare dividends and to take all
other such actions as might be taken by the board of directors, until such
time as the court determines (1) that it would be in the best interests of
the creditors and its stockholders to restore the management of such cor-
poration to its board of directors and, (2) in the case of a previous dead-
lock on the board of directors or in its election, that a new board has been
duly elected:

(a) In an action by a stockholder when it is established:

(1) That the directors are deadlocked in the management of the cor-
porate affairs and the stockholders are unable to break the deadlock, and
that irreparable injury to the corporation is being suffered or is threat-
ened by reason thereof; or

2) That the acts of the directors or those in control of the corpora-
tion are illegal, oppressive or fraudulent; or

3) That as shown by the proceedings at any meeting of the stock-
holders the stockholders are deadlocked in voting power and that irrepa-
rable injury to the corporation is being suffered or is threatened by reason
thereof; or

(4) That the corporate assets are being misapplied or wasted.

(b) In an action by a creditor:

(1) When the claim of the creditor has been reduced to judgment
and an execution thereon returned unsatisfied and it is established that
the corporation is insolvent; or
(2) When the corporation has admitted in writing that the claim of
the ilar is due and owing and it is established that the corporation is
insolvent.

(c) Upon application by a corporation which has filed a statement of
intent to dissolve, as provided in this act, to have its liquidation continued
under the supervision of the court.

(d) Upon application by the board of directors when it is established
that circumstances make it impossible to obtain a representative vote by
stockholders on the question of dissolution and that the continuation of
the business of the corporation is not in the interest of the stockholders
but it is desirable in their interest that the assets and business be liquidated.

(e) When the Commission has instituted a proceeding for the invol-
untary dissolution of a corporation and entered an order finding that the
corporation should be dissolved but that liquidation of its business and
affairs should precede the entry of an order of dissolution.

(f) After dissolution, pursuant to the provisions of this act or any
laws of this State in effect at any time prior to the effective date of this
act, upon the application of any person, for good cause, with regard to
any assets or business that may remain and the jurisdiction conferred by
this clause may also be exercised by any such court in any city or county
where any property may be situated whether of a domestic or of a foreign
corporation that has been dissolved.

It shall not be necessary to make directors or stockholders parties to
any such action or proceeding unless relief is sought against them
personally. :

Any liquidation pursuant to the provisions of this section or other
applicable provisions of law prior to the effective date of this amendment
shall be held, and the same is hereby declared, valid and effective in all
respects if otherwise valid according to the law then in force.