Section 16-6a-1414 - Grounds and procedure for judicial dissolution(1) The attorney general or the division director may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve a nonprofit corporation if it is established that: (a) the nonprofit corporation obtained the nonprofit corporation's articles of incorporation through fraud; or(b) the nonprofit corporation has continued to exceed or abuse the authority conferred upon the nonprofit corporation by law.(2) A member or director of a nonprofit corporation may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve the nonprofit corporation if it is established that: (a)(i) the directors are deadlocked in the management of the corporate affairs;(ii) the members, if any, are unable to break the deadlock; and(iii) irreparable injury to the nonprofit corporation is threatened or being suffered;(b) the directors or those in control of the nonprofit 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 or would have expired upon the election of their successors; or(d) the corporate assets are being misapplied or wasted.(3) A creditor may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve a nonprofit corporation if it is established that:(a)(i) the creditor's claim has been reduced to judgment;(ii) the execution on the judgment has been returned unsatisfied; and(iii) the nonprofit corporation is insolvent; or(b)(i) the nonprofit corporation is insolvent; and(ii) the nonprofit corporation has admitted in writing that the creditor's claim is due and owing.(4)(a) As used in this Subsection (4): (i) "Misconduct claim" means: (A) a claim for wrongful death, fraud, breach of public trust, or an intentional tort; or(B) a claim regarding criminal conduct by a director, member, or employee of the nonprofit corporation that is a felony offense or an offense described in Title 76, Chapter 5, Part 4, Sexual Offenses, Title 76, Chapter 5b, Sexual Exploitation Act, Section 76-7-102, Section 76-9-702, or Section 76-9-702.1.(ii) "Nonprofit corporation" does not include a bona fide church or religious organization.(b) If a person brings a misconduct claim in an action against a nonprofit corporation, the person may also bring an action to dissolve the nonprofit corporation.(c) If a person brings a dissolution action under Subsection (4)(b), the court may only dissolve the nonprofit corporation if the court finds the nonprofit corporation is liable for the misconduct claim.(d) Upon a motion by the plaintiff in a dissolution action described in Subsection (4)(b), the court may:(i) issue an injunction preventing the nonprofit corporation from selling or disposing of any assets held by the nonprofit corporation; and(ii) require the nonprofit corporation to deposit funds, or post a bond, with the court for the amount of damages pleaded in the complaint.(e) The court may void a transaction that is made by the nonprofit corporation within 12 months before the day on which the action was filed with the court if the court finds that the transaction is voidable under Section 25-6-202.(5) If an action is brought under this section, it is not necessary to make directors or members parties to the action to dissolve the nonprofit corporation unless relief is sought against the members individually.(6) In an action under this section, the court may:(b) appoint a receiver or a custodian pendente lite with all powers and duties the court directs; or(c) take other action required to preserve the nonprofit corporation's assets wherever located and carry on the business of the nonprofit corporation until a full hearing can be held.(7) If a nonprofit corporation has been dissolved by voluntary or another action taken under this part:(a) the nonprofit corporation may bring a proceeding to wind up and liquidate its business and affairs under judicial supervision in accordance with Section 16-6a-1405; and(b) the attorney general, a director, a member, a creditor, or a plaintiff under Subsection (4) may bring a proceeding to wind up and liquidate the affairs of the nonprofit corporation under judicial supervision in accordance with Section 16-6a-1405, upon establishing the grounds set forth in Subsections (1) through (4).Amended by Chapter 331, 2024 General Session ,§ 2, eff. 7/1/2024.Amended by Chapter 401, 2023 General Session ,§ 17, eff. 7/1/2024.Amended by Chapter 331, 2024 General Session ,§ 1, eff. 3/18/2024.Enacted by Chapter 300, 2000 General Session.