Stockholders’ application for injunction and appointment of receiver when corporation mismanaged.
1. Any holder or holders of one-tenth of the issued and outstanding stock may apply to the district court, held in the district where the corporation has its principal place of business, for an order dissolving the corporation and appointing a receiver to wind up its affairs, and by injunction restrain the corporation from exercising any of its powers or doing business whatsoever, except by and through a receiver appointed by the court, whenever:
(a) The corporation has willfully violated its charter;
(b) Its trustees or directors have been guilty of fraud or collusion or gross mismanagement in the conduct or control of its affairs;
(c) Its trustees or directors have been guilty of misfeasance, malfeasance or nonfeasance;
(d) The corporation is unable to conduct the business or conserve its assets by reason of the act, neglect or refusal to function of any of the directors or trustees;
(e) The assets of the corporation are in danger of waste, sacrifice or loss through attachment, foreclosure, litigation or otherwise;
(f) The corporation has abandoned its business;
(g) The corporation has not proceeded diligently to wind up its affairs, or to distribute its assets in a reasonable time;
(h) The corporation has become insolvent;
(i) The corporation, although not insolvent, is for any cause not able to pay its debts or other obligations as they mature; or
(j) The corporation is not about to resume its business with safety to the public.
2. The application may be for the appointment of a receiver, without at the same time applying for the dissolution of the corporation, and notwithstanding the absence, if any there be, of any action or other proceeding in the premises pending in such court.
3. In any such application for a receivership, it is sufficient for a temporary appointment if notice of the same is given to the corporation alone, by process as in the case of an application for a temporary restraining order or injunction, and the hearing thereon may be had after 5 days’ notice unless the court directs a longer or different notice and different parties.
4. The court may, if good cause exists therefor, appoint one or more receivers for such purpose, but in all cases directors or trustees who have been guilty of no negligence nor active breach of duty must be preferred in making the appointment. The court may at any time for sufficient cause make a decree terminating the receivership, or dissolving the corporation and terminating its existence, or both, as may be proper.
5. Receivers so appointed have, among the usual powers, all the functions, powers, tenure and duties to be exercised under the direction of the court as are conferred on receivers and as provided in NRS 78.635, 78.640 and 78.645, whether the corporation is insolvent or not.
Last modified: February 26, 2006