Opinion ID: 2639853
Heading Depth: 3
Heading Rank: 2

Heading: Part 12 Grants Broad Authority to the District Court in Directing Winding-Up Procedures

Text: ¶ 18 Olympus argues that Utah Code sections 48-2c-1210 to -1212, governing judicially supervised dissolution, grant the district court broad authority to direct the procedures for winding up a dissolved company. We agree. ¶ 19 Part 12 of the Act governs dissolution. Utah Code Ann. §§ 48-2c-1201 to -1214 (2007). It provides for three types of dissolution: voluntary, administrative, and judicial. It also directs that a dissolved company shall wind up its affairs as provided in Part 13 of this chapter. § 48-2c-1203(1). Accordingly, a voluntarily dissolved company is required to dispose of claims in conformity with either section 1305 or section 1306. Since each section is permissive, the dissolved company may choose either or both. ¶ 20 In an administrative dissolution, the company must similarly follow the provisions of part 13, but is more specifically directed to give notice to claimants in the manner provided in Sections 48-2c-1305 and 48-2c-1306. § 48-2c-1207(3)(a)(i)-(ii) (emphasis added). Thus, administratively dissolved companies may not choose between the two sections but are required to dispose of claims by both notification and publication. ¶ 21 When a company is judicially dissolved, the Act requires the court to direct the winding-up process in accordance with Part 13. § 48-2c-1213(2). It does not, however, specify the use of 1305 or 1306. Thus, the overseeing court may choose to employ either or both. In addition, the Act gives a court granting a decree of dissolution the authority to appoint a receiver to wind up and liquidate the company's affairs and to describe the powers and duties of the receiver... in its appointing order. § 48-2c-1212(1), (3). The Act thereby grants the court broad authority to direct the winding-up process. Thus, the court may choose to adopt sections 1305 and/or 1306 to dispose of claims, but it is not required to do so. It may also fashion a more suitable procedure through the use of a receiver. ¶ 22 Matthews argues that the legislature intended for all dissolved companies to be governed by part 13 of the Act, including sections 1305 and 1306, and that it would be unjust to allow judicially dissolved companies appointing receivers the authority to do otherwise. We agree that part 13 governs every dissolved company. However, when read with part 12, it appears the legislature meant to allow judicially supervised dissolutions more flexibility. ¶ 23 When a company is judicially dissolved under the Act, the overseeing court is not required to adopt the provisions of either, or both, sections 1305 or 1306 to dispose of claims against the company. If the court does adopt either section, it is bound to follow every provision of the adopted section. If it does not, it may fashion its own claim disposition procedures pursuant to the broad authority granted by part 12 of the Act.