2020 Code of Alabama
Title 10A - Alabama Business and Nonprofit Entities Code.
Chapter 3 - Nonprofit Corporations.
Article 7 - Dissolution.
Section 10A-3-7.10 - Liquidation - Jurisdiction of Court to Liquidate Assets and Affairs of Corporation.

Section 10A-3-7.10

Liquidation - Jurisdiction of court to liquidate assets and affairs of corporation.

(a) The circuit court of the county in which the nonprofit corporation's principal office is located in this state, and if none in this state, the circuit court for the county in which the nonprofit corporation's most recent registered office is located shall have full power to liquidate the assets and affairs of a nonprofit corporation:

(1) In an action by a member or director when it is established:

a. That the directors are deadlocked in the management of the corporate affairs and that irreparable injury to the nonprofit corporation is being suffered or is threatened by reason thereof, and either that the members are unable to break the deadlock or there are no members having voting rights;

b. That the acts of the directors or those in control of the nonprofit corporation are illegal, oppressive, or fraudulent;

c. That the members entitled to vote in the election of directors are deadlocked in voting power and have failed for at least two years to elect successors to directors whose terms have expired or would have expired upon the election of their successors;

d. That the corporate assets are being misapplied or wasted; or

e. That the nonprofit corporation is unable to carry out its purposes.

(2) In an action by a creditor:

a. When the claim of the creditor has been reduced to judgment and an execution thereon has been returned unsatisfied and it is established that the nonprofit corporation is insolvent; or

b. When the nonprofit corporation has admitted in writing that the claim of the creditor is due and owing and it is established that the nonprofit corporation is insolvent.

(3) Upon application by a nonprofit corporation to have its dissolution continued under the supervision of the court.

(4) When an action has been filed by the Attorney General to dissolve a nonprofit corporation and it is established that liquidation of its affairs should precede the entry of an order of dissolution.

(b) Proceedings under this section shall be brought in the circuit court for the county in which the nonprofit corporation's principal office is located in this state, and if none in this state, in the circuit court for the county in which the nonprofit corporation's most recent registered office is located.

(c) It shall not be necessary to make directors or members parties to any action or proceedings unless relief is sought against them personally.

(Acts 1984, No. 84-290, p. 502, §57; §10-3A-149; amended and renumbered by Act 2009-513, p. 967, §192; Act 2020-73, §10.)