Opinion ID: 2395909
Heading Depth: 1
Heading Rank: 3

Heading: vesting of corporate contract claim in shareholder

Text: [¶ 15] Sturtevant also argues that, as a matter of law, he is entitled to enforce the snowplowing contract because he was the sole shareholder and all assets of a dissolved corporation devolve to the former shareholders. The equitable principle that former shareholders have the right to a fair share of assets in a dissolved corporation is well-established in many states. Hutson v. Fulgham Industries, Inc., 869 F.2d 1457, 1461 (11th Cir.1989). There is a split of authority as to whether contracts are assets that pass by law to the shareholders of a corporation. [¶ 16] In Hutson the Eleventh Circuit, applying Alabama law, held that a corporation's contract claim which was not asserted within the time period of the survival statute is not an asset that devolves to the shareholder following the corporation's dissolution. The reasoning of the Hutson court is that allowing unasserted contract claims to devolve to the shareholder by operation of law and to allow claims to be brought by the shareholder after the survival period renders the survival statute a nullity. The policy behind the survival statute, which is to provide a definitive period for resolving claims by and against a dissolved corporation, would be thwarted. Hutson, 869 F.2d at 1463. Other courts are in agreement. See Davis v. St. Paul Fire & Marine Ins. Co., 727 F.Supp. 549, 552-53 (D.S.D.1989); Halliwell Assocs., Inc. v. C.E. Maguire Servs., Inc., 586 A.2d 530, 534-35 (R.I.1991) (applying Massachusetts law). [¶ 17] On the other hand, some courts have held that unasserted contract claims pass to the shareholders of a dissolved corporation in their individual capacities. In Fischer v. City of Dover, 131 N.H. 469, 554 A.2d 1293, 1297 (1989), the court stated that the survival statute served to expand the rights of corporations and did not limit the equitable rule that all assets devolve to former shareholders. [¶ 18] Both the Alabama survival statute in Hutson and the New Hampshire survival statute in Fischer are virtually identical to the Maine survival statute. We accept the reasoning of the Hutson court in interpreting the statute. We are persuaded that in enacting the survival statute the Legislature intended that a corporation assert all of its claims within the two-year period and claims that are not asserted are lost. It was incumbent upon Sturtevant as the dissolving corporation's president to make provision for the contract before filing the articles of dissolution. The record is devoid of evidence that Sturtevant took any steps before dissolution to insure that he, as an individual, would be able to enforce the contract.