Rule 3.612.Winding Up of Corporation Whose Term or Charter Has Expired

MCR 3.612 supplies the procedure for winding up a corporation that has outlived its own term or charter. Subrule (A) ties the rule to actions under MCL 450.1801 et seq. and leaves the general rules of procedure in place except where this rule or that statute provides otherwise. What the rule adds is a detailed pleading package, a way to bring absent stockholders and creditors before the court, and a set of later procedures borrowed from another rule.

The complaint

Subrule (B) lists six things the complaint must include: the nature of the plaintiff's interest in the corporation or its property, the date of organization, the title and date of approval of any special act the corporation was organized under, and the term of corporate existence; whether any stockholders are unknown to the plaintiff; a statement that the complaint is filed on behalf of the plaintiff and all other persons interested in the corporation's property as stockholders, creditors, or otherwise, who may join as parties plaintiff and share the expense; an incorporation by reference of the statements required by subrule (C); other appropriate allegations; and a demand for relief, which under subrule (B)(6) may include winding up the affairs of the corporation, disposing of and distributing its assets, and appointing a receiver of its property.

What gets attached

Subrule (C) requires six statements attached to the complaint. Several run only so far as known to the plaintiff, which recognizes that a plaintiff often works from incomplete records:

• the articles of incorporation, if on file with the Department of Commerce, and the special act if the corporation was organized by one;
• a statement of the corporation's assets;
• a statement of capital stock and the amount paid in, taken from the last report on file with the Department of Commerce, or from the articles on file there, or from the special legislative act;
• a list of stockholders with addresses and shares, if the stock records are accessible to the plaintiff;
• a statement of encumbrances and claims with the names and addresses of encumbrancers and claimants; and
• a statement of debts, creditors, and the consideration for each debt.

Parties and notice

Under subrule (D) the corporation must be a defendant. Persons claiming encumbrances on the property may be made defendants, and no stockholder or creditor has to be. Subrule (E) offers two routes for notice: process issued and served as in other civil actions, or an order for the appearance and answer of the corporation, its stockholders, and creditors at least 28 days after the date of the order, published in the manner prescribed by MCR 2.106. Once proof of publication is filed and the time set in the order has run, subrule (E)(3) allows an order taking the complaint as confessed by those who did not appear.

Appearing and defending

Subrule (F)(1) opens the defense to three groups: a stockholder who held stock while the corporation existed and still retains rights in its property by owning stock; an assignee, purchaser, heir, devisee, or personal representative of a stockholder; and a creditor whose claim is not barred by the statute of limitations. All of them defend in the name of the corporation. A person other than the corporation named as a defendant must be served with process as in other civil actions.

After the pleadings

Subrule (G) sends hearings and later proceedings to MCR 3.611, so far as applicable, rather than repeating them. Subrule (H) keeps the action alive if the plaintiff turns out not to be a stockholder or creditor: another stockholder or creditor who has appeared may continue it.