Sunday, September 27, 2009

Corporation Can Continue To Maintain Lawsuit As Part Of Winding Up Its Business

In Selepro, Inc. v. Church, et al (4D08-2256), the Fourth District reversed the trial court and held "a dissolved foreign corporation can continue to maintain an action in Florida as part of 'winding up' its business."

In this case:
The plaintiff argues that section 607.1421, Florida Statutes (2008), authorizes a corporation that is administratively dissolved to wind up its affairs by maintaining a court action. The defendants respond that sections 607.1501 and 607.1502 prevent a foreign corporation without a certificate of authority from maintaining a proceeding in Florida until the certificate of authority is obtained. We agree with the plaintiff.
In conclusion, the plaintiff filed suit when it was in good standing in Florida. The suit alleged claims of misappropriation, diversion of corporate assets, conversion, fraud, breach of contract, and tortious interference with a business opportunity. When the defendants filed their motion for summary judgment, the plaintiff had been administratively dissolved in Florida and was no longer an active corporation in Delaware. However, it was not transacting business, but instead winding up its affairs by amassing assets for final distribution though th e prosecution of the underlying suit. Accordingly, the corporation should be permitted to maintain the proceeding solely to wind up its affairs, pursuant to section 607.1421(3), Florida Statutes.


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