Opinion ID: 1518197
Heading Depth: 1
Heading Rank: 6

Heading: The Deadlock Statute.

Text: Finally, Plaintiff sought to avail himself of the use of 13 M.R.S.A. § 542(1)(B) as amended, the deadlock statute, which empowered the Court to enter judgment dissolving a corporation under certain circumstances. Among them were allegation and proof by a stockholder that A(2) Through fraud, neglect, gross mismanagement of [the corporation's] affairs, attachment litigation or otherwise, its estate and effects are in danger of being wasted, or ...... B(3) The corporation is otherwise deadlocked in its management. The Single Justice found that Plaintiff had standing to pursue this aspect of his complaint but noted that a prior action for such relief had been brought by Laskey (Plaintiff's predecessor in ownership of shares) against Loew and he concluded erroneouslythat this action under the deadlock statute was still pending and that nothing would prevent Plaintiff from intervening and seeking his relief in that action. He, therefore, dismissed this aspect of Plaintiff's complaint without prejudice. The Justice's information as to the status of Laskey's action was incomplete and the record discloses that this action had been dismissed under M.R.C.P., Rule 41(b)(1) on November 15, 1968. Subsequent to the Justice's decree and the Plaintiff's appeal therefrom, the deadlock statute was repealed effective January 1, 1972. [12] In its place was enacted 13-A M.R.S.A. § 1115 which provides essentially the same relief to the stockholder on proof of substantially the same grounds among others: C. The shareholders are so divided respecting the management of the business and affairs of the corporation that the corporation is suffering or will suffer irreparable injury, or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally, or D. The acts of the directors or those in control of the corporation are illegal or fraudulent; or E. The corporate assets are being misapplied or wasted . . . We agree with the Justice that Plaintiff's allegations as to corporate mismanagement, waste of assets and deadlock are sufficient to entitle him to seek relief on this ground. The entry shall be: Appeal sustained. Remanded to Superior Court for further proceedings consistent with this opinion. WEBBER and WERNICK, JJ., did not sit.