A court of record with proper venue may dissolve a corporation if listed grounds are proved.
Any court of record with proper venue in accordance with § 48-24-302 may dissolve a corporation: In a proceeding by the attorney general and reporter if it is established that the corporation: Obtained its charter through fraud; Has exceeded or abused the authority conferred upon it by law; Has violated any provision of law resulting in the forfeiture of its charter; or Has carried on, conducted, or transacted its business or affairs in a persistently fraudulent or illegal manner; provided, that the enumeration of these grounds for dissolution shall not exclude actions or special proceedings by the attorney general and reporter or other state officials for the dissolution of a corporation for other causes as provided in this chapter or in any other statute of this state; In a proceeding by a shareholder if it is established that: The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally, because of the deadlock; 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; The shareholders are deadlocked in voting power and have failed, for a period that includes at least two (2) consecutive annual meeting dates, to elect directors; or The corporate assets are being misapplied or wasted; In a proceeding by a creditor if it is established that: The creditor's claim has been reduced to judgment, the execution on the judgment returned unsatisfied, and the corporation is insolvent; or The corporation has admitted in writing that the creditor's claim is due and owing and the corporation is insolvent; or In a proceeding by the corporation to have its voluntary dissolution continued under court supervision. Acts 1986, ch. 887, § 14.30; 1989, ch. 451, § 23. Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 354. Tennessee Forms (Robinson, Ramsey and Harwell), No. 1-23.06-1. Tennessee Jurisprudence, 7 Tenn. Juris., Corporations, §§ 96, 97. NOTES TO DECISIONS Decisions Under Prior Law 1. Suit by Stockholder. 2. Parties. 3. Bankruptcy. 1. Suit by Stockholder. While a stockholder who was a creditor may file a winding-up bill, the other stockholders might in the suit show that the claim was invalid, though judgment was rendered in the stockholder/creditor's favor by pro confesso against the corporation. Crutchfield v. Mutual Gaslight Co., 3 Shannon's Cases 155, 2 S.W. 658, 1886 Tenn. LEXIS 178 (1886). 2. Parties. Stockholders were proper parties to a general creditors' bill to wind up the corporation as an insolvent concern. Sugg v. Farmers' Mut. Ins. Ass'n, 63 S.W. 226, 1901 Tenn. Ch. App. LEXIS 66 (1901). 3. Bankruptcy. Where a corporation conveys its property to the owner of its capital stock for a nominal consideration the right to set aside the deed for fraud passes to the trustee in bankruptcy who alone can sue to subject the proceeds to the corporation's obligations. State v. Allstadt, 166 Tenn. 349, 61 S.W.2d 473, 1932 Tenn. LEXIS 140 (1933), rehearing denied, 166 Tenn. 349, 62 S.W.2d 566 (1933).