Court Opinion

ID: 9738237
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:46:31.1951+00
Date Added: 2024-06-11T07:24:03.949707
License: Public Domain

DAVID T. PROSSER, J.
¶ 158. (concurring in part, dissenting in part). The majority opinion affirms the decisions of the circuit court and the court of appeals that the buyout (Buy-Sell) agreement, under all the facts and circumstances, is unenforceable; and it remands the case to the circuit court for appointment of a receiver. I concur in these determinations.
¶ 159. I do not agree, however, that the circuit court erred when it permitted Evald Moulding, Inc. to pay attorney fees for representation of the corporation and its president, chief executive officer, and treasurer, *345Jon A. Hauser, who also is a corporation director. In my view, the majority's decision on this issue overlooks critical facts and results in a mistaken interpretation of the indemnification provisions of the Wisconsin corporation statutes. Because the majority's decision on indemnification of attorney fees has ramifications well beyond this case, I respectfully dissent.
I
¶ 160. Dr. William Ehlinger was a dentist who practiced in Watertown. In addition to his dental practice, Dr. Ehlinger invested in a number of business enterprises, including Evald Moulding, Inc. From 1981 until 1985, Dr. Ehlinger, Jon Hauser, and a third shareholder, James Safford, each owned one-third interest in Evald. In 1985 Dr. Ehlinger and Hauser bought out Safford's interest. In 1989 Hauser took over running the business. In 1992 Dr. Ehlinger and Hauser entered into the Buy-Sell Agreement at issue in this case.
¶ 161. The 1992 Buy-Sell Agreement included the following provisions:
3. Transfer upon Disability. Upon a Shareholder becoming totally disabled as defined hereafter, for a period of twenty-four (24) consecutive months, the other Shareholder shall have the first right to purchase all or part of the stock owned by the disabled Shareholder. Any part of the stock owned by the disabled Shareholder not initially purchased by the other Shareholder shall then be offered to the Corporation for purchase. Any part of the stock owned by the disabled Shareholder not purchased by the Corporation must then be purchased by the other Shareholder. The disabled Shareholder or his legal representative shall sell all of the stock owned by the disabled Shareholder at *346the Agreed Purchase Price as defined in Section 6 hereof upon the terms and conditions set forth herein. If there is no disability buy-out insurance for a Stockholder, "totally disabled" as used herein shall be defined as being unable to perform all the substantial and material duties of his employment with Evald Moulding Company, Inc.; or of the occupation or profession he practiced on the date he became disabled. ...

....

6. Purchase Price.
(a) For transfers of all of a Shareholder's stock at his death, or upon his becoming disabled, the purchase price of a Shareholder's shares of stock shall be $350,000.00 or Book Value whichever is greater, except if the Shareholders have determined by unanimous resolution passed subsequent to the date of this agreement that the purchase price shall be other than $350,000.00, then the most recent such resolution shall determine the purchase price. For transfers of all of a Shareholder's stock on threat of involuntary transfer, the purchase price of a Shareholder's shares of stock shall be the book value of said shares as of the end of the last fiscal year.
....
(3) For transfers on a Shareholder being disabled for twenty-four (24) consecutive months, except for payment funded by disability buy-out insurance, payment shall be made 20% within ninety (90) days of the end of the twenty-four (24) consecutive months of disability, and 80% within sixty (60) months after said initial payment. The portion of the purchase payment not paid within ninety (90) days of the end of the twenty-four (24) consecutive months of disability shall bear annual interest equal to the prime rate at Bank One, Watertown, Wisconsin, or at its successor banking institution, and shall be adjusted at the end of each annual quarter. Interest shall be paid at the end of each *347annual quarter, and there shall be no prepayment penalty. For transfers upon such twenty-four (24) consecutive month disability which are funded by disability buy-out insurance payment shall be sought from the insurer and paid over to the disabled Shareholder, as soon as practicable.
....
8. Closing of Transactions. The Closing of any transaction hereunder shall take place at the principal office of the Corporation on the date agreed upon by the parties, provided however, that unless otherwise agreed:
....
(b) Disability Transfers. In the event of a transfer upon disability as hereinabove provided, such closing for payments not funded by insurance, shall take place for the first 20% payment, at 10:00 a.m. on the 90th day after twenty-four (24) consecutive months of disability. The remaining 80% shall be payable on a monthly basis with interest as set forth in paragraph 6(b)(3) above.
(Emphasis added.)
¶ 162. In May 1993 Dr. Ehlinger was diagnosed with Parkinson's disease. He took a leave of absence from his dental practice to seek medical treatment. He was never able to resume his practice but did engage in other business activities.
¶ 163. In December 2000 Dr. Ehlinger asked Hauser to make an offer for his one-half interest in Evald. Majority op., ¶ 11. In June 2001 Hauser sent a letter to Dr. Ehlinger invoking the disability provision of the Buy-Sell Agreement. Majority op., ¶ 12. Hauser calculated the book value of Dr. Ehlinger's shares in Evald at $431,400. Id. Dr. Ehlinger did not accept this purchase offer, which was based on Evald's most recent fiscal year-end statement. Id.
*348¶ 164. Dr. Ehlinger may have been annoyed at the manner in which Hauser made his purchase offer. He clearly was not satisfied with the size of the offer. He subsequently called a meeting of the shareholders and directors for April 22, 2002. Dr. Ehlinger made a motion at that meeting that Evald's books be audited but it was not adopted. The shareholders failed to elect directors. Id., ¶ 13. Hauser's subsequent effort to close on his earlier purchase offer also failed when Dr. Ehlinger refused to cash Hauser's 20 percent check.
¶ 165. On April 30, 2003, Dr. Ehlinger filed suit against Hauser and Evald Moulding. The suit asked the court to (1) dissolve the corporation and appoint a receiver, as provided in Wis. Stat. §§ 180.1431 and 180.1432; (2) obtain an accounting of a separate dissolved partnership and liquidate and distribute its assets; (3) declare the respective rights of the parties under the 1992 Buy-Sell Agreement; and (4) issue a preliminary injunction against Hauser to restrain him from implementing redemption of Dr. Ehlinger's stock or exercising a proxy vote of Dr. Ehlinger's shares.
¶ 166. In his suit, Dr. Ehlinger described Hauser as "the President, Treasurer and Chief Executive Officer of Evald Moulding, Inc." Dr. Ehlinger alleged that he sought dissolution of Evald, in part, "because of the actions of defendant Hauser." He complained about the amount of compensation and bonuses paid to Hauser; the employment and compensation of Hauser's relatives; the amount and nature of expenses paid to Hauser and his relatives; Hauser's refusal to consider Ehlinger's relatives for employment by Evald; and "the nonpayment of dividends."
¶ 167. The suit alleged: "On March 26, 2002, the plaintiff served notice of an annual meeting of the shareholders and directors of Evald to address the *349matters that were in dispute regarding the operation of Evald." (Emphasis added.) At the April 22 meeting, Dr. Ehlinger made numerous motions. These motions were recounted in the complaint. The complaint alleged that the "defendant refused" to approve Dr. Ehlinger's motions. The complaint distinguished actions not approved by "the shareholders" from motions not approved by the "defendant."
¶ 168. The complaint stated: "the directors of Evald are deadlocked in the management of its corporate affairs." (Emphasis added.)
¶ 169. The complaint twice asserted that financial statements of the corporation were "prepared by the defendant [Hauser]."
¶ 170. Paragraph 33 stated:
The defendant has assumed total control of Evald and has for over 7 years operated Evald in a manner that benefits primarily and disproportionately the defendant and the members of his family. The defendant is thus acting and will act in a manner that is oppressive to the plaintiff, which constitutes grounds for the judicial dissolution of the corporation at the request of the plaintiff under Section 180.1430(2)(b) of the Wisconsin Statutes.
¶ 171. In sum, although Hauser was undoubtedly a shareholder, he is repeatedly referred to in the complaint in his capacity as an officer or director.
¶ 172. In the complaint, Dr. Ehlinger also named Evald Moulding as a defendant. The suit alleged that "Evald is named as a defendant because plaintiff seeks judicial dissolution of Evald because of impasse and because of the actions of defendant Hauser." Complaint, ¶ 3 (emphasis added). Dr. Ehlinger asked that a receiver be appointed by the court. He asked that the *350receiver, in turn, "make an accounting" of the corporation and "dispose of its business." The complaint was signed by Attorney Ralph J. Ehlinger.
¶ 173. The critical issue in this dissent is whether the circuit court erred when it permitted the corporation to pay attorney fees to represent the corporation's rights and interests in litigation to dissolve the corporation, and attorney fees to represent its officer/director Jon Hauser, whose conduct is alleged to provide the grounds for dissolution. In short, did the circuit court err in allowing attorney fees after thoroughly considering the facts above?
II
¶ 174. In the 1980s, a national "director and officer liability crisis" led to enactment of legislation to "give added protection to corporate officials who act within the scope of their corporate duties." Paul Milakovich, A Comprehensive Approach: Director and Officer Indemnification in Wisconsin, 71 Marq. L. Rev. 407, 407 (1988). Wisconsin passed legislation to address this "crisis" in 1987. 1987 Wis. Act 13. The new legislation created Wis. Stat. § 180.044 (1987-88). 1989 Wis. Act 303 renumbered § 180.044 to § 180.0851 and made insignificant modifications. Section 180.0851 now reads:
Mandatory indemnification. (1) A corporation shall indemnify a director or officer, to the extent that he or she has been successful on the merits or otherwise in the defense of a proceeding, for all reasonable expenses incurred in the proceeding if the director or officer was a party because he or she is a director or officer of the corporation.
(2)(a) In cases not included under sub. (1), a corporation shall indemnify a director or officer against *351liability incurred by the director or officer in a proceeding to which the director or officer was a party because he or she is a director or officer of the corporation, unless liability was incurred because the director or officer breached or failed to perforin a duty that he or she owes to the corporation and the breach or failure to perform constitutes any of the following:
1. A willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest.
2. A violation of the criminal law, unless the director or officer had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful.
3. A transaction from which the director or officer derived an improper personal profit.
4. Willful misconduct.
(b) Determination of whether indemnification is required under this subsection shall be made under s. 180.0855.
(c) The termination of a proceeding by judgment, order, settlement or conviction, or upon a plea of no contest or an equivalent plea, does not, by itself, create a presumption that indemnification of the director or officer is not required under this subsection.
(3) A director or officer who seeks indemnification under this section shall make a written request to the corporation.
(4) (a) Indemnification under this section is not required to the extent limited by the articles of incorporation under s. 180.0852.
(b) Indemnification under this section is not required if the director or officer has previously received *352indemnification or allowance of expenses from any person, including the corporation, in connection with the same proceeding.
Wis. Stat. § 180.0851 (emphasis added).
¶ 175. In his Comment, Paul Milakovich made the following observations:
Wisconsin has recently joined numerous other states in passing protective statutes.... With the adoption of these statutes, directors and officers of Wisconsin corporations can make decisions without the unreasonable threat of outrageous litigation expenses or personal liability.
....
In codifying its indemnification provisions for directors and officers, the Wisconsin legislature took a rather unique approach. While most states have adopted mandatory indemnification provisions in limited situations and permissive indemnification in all others, Wisconsin has combined both approaches into a single mandatory indemnification section. Wisconsin continues to require a corporation to indemnify its directors and officers to the extent they were successful on the merits in the defense of a proceeding. However, the difference under the 1987 legislation can be seen in circumstances which do not fall within this "success on the merit" language. Section 180.044(2) of the Wisconsin Statutes now provides that a corporation shall indemnify a director or officer against liability unless it is determined that the director or officer breached or failed to perform a duty he or she owed to the corporation and the breach or failure to perform constitutes:
(a) A wilful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest;
(b) A violation of criminal law, unless the director *353or officer has reasonable cause to believe his or her conduct was lawful or no reasonable cause to believe his or her conduct was unlawful;
(c) A transaction from which the director or officer derived an improper personal profit; or
(d) Wilful misconduct.
If any of these criteria occur, the director or officer cannot be indemnified under Wisconsin law. Like the statute dealing with the limitation of a director's liability, this provision applies to all Wisconsin corporations unless the corporation provides otherwise.
Milakovich, supra, at 428-29 (footnotes omitted).
The area of director and officer indemnification is one in which the Wisconsin legislature has adopted a vastly different approach than that adopted by other states. Most states require indemnification to the extent a director or officer is successful on the merits of his or her actions and they permit indemnification in most other circumstances. Wisconsin, on the other hand, requires indemnification in instances when the officer or director is successful on the merits and in situations in which the corporate official is not successful on the merits, as long as the individual's conduct does not fall within the statutory exclusions. This indemnification provision is unique in that it provides a director or officer the assurance that indemnification will be available, unless the corporation limits this right in its articles of incorporation.
Id. at 436 (footnotes omitted).
¶ 176. These 1988 observations are echoed in the Wisconsin Practice Series by Jay E. Grenig and Nathan Fishbach. They write:
The "mandatory" indemnification rights are straightforward and consistent with common past prac*354tices. They are not mandatory, however, since any corporation may limit them in its articles of incorporation. Under these provisions, an officer or director is entitled to indemnification for expenses (including reasonable attorney fees) if they successfully defend in a proceeding in which they are a party because they are such officer or director. Even if the officer or director is unsuccessful in its defense of a proceeding, it is entitled to indemnification by the corporation for all liability, including expenses, unless the liability resulted from criminality, willful misconduct, conflict of interest, or improper personal profit by the director.
2 Grenig & Fishbach, Wisconsin Practice Series: Methods of Practice § 52.71 (4th ed. 2004).1
III
¶ 177. We must examine the text of Wis. Stat. § 180.0851, considering this historical and analytical background. Subsection (1) reads as follows:
Mandatory indemnification. (1) A corporation shall indemnify a director or officer, to the extent that he or she has been successful on the merits or otherwise in the defense of a proceeding, for all reasonable expenses incurred in the proceeding if the director or officer was a party because he or she is a director or officer of the corporation.
Wis. Stat. § 180.0851(1) (emphasis added).
¶ 178. This subsection presents several obvious questions in light of Jon Hauser's status as a director and officer, as well as a shareholder. What does the phrase "if the director or officer was a party because he *355or she is a director or officer of the corporation" mean? Does it mean that if the "director or officer" also is a significant shareholder, the director or officer loses his right to mandatory indemnification? Does it mean that if a director or officer is sued partly in his capacity as a director or officer and partly in his capacity as a shareholder, the director or officer loses his right to mandatory indemnification?
¶ 179. In my view, a director or officer has a right to indemnification "to the extent that he or she has been successful on the merits or otherwise in the defense of a proceeding... if the director or officer was a party because he or she is a director or officer of the corporation." Wis. Stat. § 180.0851(1).
¶ 180. The lengthy rendition of the facts in this dissent establishes beyond dispute that Hauser was sued in large part because of his actions as a director or officer. For instance, in Paragraph 33 of the Complaint, quoted in ¶ 170 above, Hauser is accused of acting in a "manner that is oppressive to the plaintiff, which constitutes grounds for the judicial dissolution of the corporation ... under Section 180.1430(2)(b)." Section 180.1430(2)(b) provides that the circuit court may dissolve a corporation if a shareholder [e.g., Dr. Ehlinger] establishes "(b) [t]hat the directors or those in control of the corporation [e.g., Hauser] have acted, are acting or will act in a manner that is illegal, oppressive or fraudulent." Wis. Stat. § 180.1430(2)(b) (emphasis added).
¶ 181. Paragraph 33 of the complaint is only part of the evidence that Hauser was sued in his capacity as a director or officer. Dr. Ehlinger alleged that Hauser prepared the financial statements, and Hauser was forced to defend them. Dr. Ehlinger alleged that Hauser refused to consider Dr. Ehlinger's relatives for employ*356ment. In my view, any interpretation of the statute that disqualifies a director or officer from mandatory indemnification if the director or officer is not sued exclusively as a director or officer, is dead wrong.
¶ 182. A second question in interpreting Wis. Stat. § 180.0851(1) concerns the phrase "to the extent that he . . . has been successful on the merits or otherwise in the defense." By its terms, this phrase cannot mean that the director or officer must prevail on the bottom line or in every respect.
¶ 183. One of the critical issues in the litigation was whether Dr. Ehlinger was disabled, thereby giving Hauser the right to invoke the disability provision of the Buy-Sell Agreement. Dr. Ehlinger alleged in his complaint that he "is not totally disabled and has not in the past been totally disabled for purposes of the 1992 Buy-Sell Agreement." See, complaint at ¶ 48. The circuit court found, however, that Dr. Ehlinger was "totally disabled" within the meaning of the agreement. See majority op., ¶ 23. This determination was made after a "five-day bench trial." Id. After this finding, the court moved on to a determination of "book value." In addition, many of Dr. Ehlinger's allegations against Hauser were never found as facts by the circuit court. The circuit court did not find that Hauser made "improper personal profit" or that his action was "illegal, oppressive or fraudulent." Moreover, even though the corporation is on track to be dissolved, it is not yet certain that Dr. Ehlinger's final share of the assets will exceed Hauser's offer of $431,400. As a result, it cannot be said that Hauser was not successful to any extent in the trial.
¶ 184. If Hauser was sued because he was a director or officer of the corporation and if he was successful "on the merits or otherwise" to some extent in the defense of the proceeding, he is entitled to "reasonable *357expenses" as a matter of law. He is entitled to reasonable expenses "to the extent" he was successful, under Wis. Stat. § 180.0851(1).
¶ 185. Director/officer indemnification is not a matter of discretion under subsection (1). When certain facts are present, a director or officer has a right to indemnification. The circuit court must be given latitude to determine the "extent" of success and the reasonableness of expenses, but it cannot deny reasonable expenses altogether. The majority makes a profound legal error if it disqualifies Hauser because he was not sued exclusively as a director or officer or because he did not prevail completely in the circuit court.
¶ 186. The majority attempts to avoid clear answers to the issues surrounding § 180.0851(1) by asserting that Hauser failed to comply With the "formalities" of applying for indemnification under § 180.0851(1) by making a written request to the corpdration, per § 180.0851(3). Majority op., ¶¶ 97-98.
¶ 187. The majority seriously suggests that Jon Hauser is disqualified from receiving the mandated indemnification under subsection (1) because he failed to sit down and write a letter to Evald's president, Jon Hauser, or Evald's treasurer, Jon Hauser, requesting payment of attorney fees. This disqualification assumes that there is no document that Hauser could produce that would qualify as "a written request" and that he could not make such a written request now. The majority does not come to grips with the meaning of Wis. Stat. § 180.0851(4) (b).
¶ 188. The majority then moves to Wis. Stat. § 180.0851(2), which also requires indemnification unless the director or officer "breached or failed to perform a duty" owed to the corporation but also requires the *358director or officer to follow one of the "means" set out in Wis. Stat. § 180.0855 to secure indemnification.
¶ 189. Wisconsin Stat. § 180.0851(2) provides:
(2)(a) In cases not included under sub. (1), a corporation shall indemnify a director or officer against liability incurred by the director or officer in a proceeding to which the director or officer was a party because he or she is a director or officer of the corporation, unless liability was incurred because the director or officer breached or failed to perform a duty that he or she owes to the corporation and the breach or failure to perform constitutes any of the following:
1. A willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director or officer has a material conflict of interest.
2. A violation of the criminal law, unless the director or officer had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful.
3. A transaction from which the director or officer derived an improper personal profit.
4. Willful misconduct.
(b) Determination of whether indemnification is required under this subsection shall be made under s. 180.0855.
(c) The termination of a proceeding by judgment, order, settlement or conviction, or upon a plea of no contest or an equivalent plea, does not, by itself, create a presumption that indemnification of the director or officer is not required under this subsection.
(3) A director or officer who seeks indemnification under this section shall make a written request to the corporation.
*359(4) (a) Indemnification under this section is not required to the extent limited by the articles of incorporation under s. 180.0852.
(b) Indemnification under this section is not required if the director or officer has previously received indemnification or allowance of expenses from any person, including the corporation, in connection with the same proceeding. (Emphasis added.)
¶ 190. The majority does not deny attorney fees because the circuit court made a determination that Hauser "breached or failed to perform a duty that he" owed to the corporation "and the breach or failure" constituted one of the four disqualifying actions set out in subsection (2)(a)1. through 4. Rather, the majority concludes that Hauser may have been eligible for attorney fees under Wis. Stat. § 180.0851(2) but he failed to seek them in a proper manner under Wis. Stat. § 180.0855(5) ("By a court under s. 180.0854."). Majority op., ¶¶ 97, 103, 119.
¶ 191. There are two problems with this legal conclusion. First, there is no time limit for an application for indemnification. A director or officer who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. Wis. Stat. § 180.0854(1). The statute does not prescribe a time. In my view, it is not too late to apply now. See Wis. Stat. § 180.0851(4)(b). Support for this interpretation is found in Wis. Stat. § 180.0851(2)(c): "The termination of a proceeding by judgment [or] order... does not, by itself, create a presumption that indemnification of the director or officer is not required under this subsection." Wis. Stat. § 180.0851(2)(c) (emphasis added). If nothing else, Hauser applied to the court of appeals when he filed his brief in the cross-appeal.
*360¶ 192. Second, as the majority notes, "[o]n four occasions, [Dr.] Ehlinger asked the circuit court to enjoin Hauser from paying for the litigation with corporate funds." Majority op., ¶ 92. On four occasions, the court denied the motions. The court of appeals thereafter affirmed the circuit court. The majority seizes on another technicality — that Hauser did not initiate an application to the circuit court for approval of attorney fees — to avoid determining the issue on the merits. Nonetheless, four times the issue was before the circuit court. Four times the circuit court knew that the court was required to order indemnification if it determined that director Hauser or officer Hauser was entitled to indemnification under § 180.0851(1) or (2), or if director Hauser or officer Hauser was "fairly and reasonably entitled to indemnification in view of all the relevant circumstances, regardless of whether indemnification is required under s. 180.0851(2)." Wis. Stat. § 180.0854(2) (b). The court made four decisions. It is virtually impossible now for an appellate court to conclude that the circuit court erroneously exercised its discretion on either the facts or the law under subsection (2).
¶ 193. Unless the circuit court erroneously exercised its discretion, the amount of an attorney fee award typically is left to the discretion of the circuit court. Stuart v. Weisflog's Showroom, 2008 WI 22, ¶ 14, 308 Wis. 2d 103, 746 N.W.2d 762. Appellate review of an award of attorney fees is limited to whether the trial court properly exercised its discretion. Benkoski v. Flood, 2001 WI App 84, ¶ 10, 242 Wis. 2d 652, 626 N.W.2d 851 (citing Hughes v. Chrysler Motors Corp., 197 Wis. 2d 973, 987, 542 N.W.2d 148 (1996)). "While the basis for an exercise of discretion should be set forth in the record, it will be upheld if the appellate court can *361find facts of record which would support the circuit court's decision." Peplinski v. Fobe's Roofing, Inc., 193 Wis. 2d 6, 20, 531 N.W.2d 597 (1995). Stated differently, "[a] reviewing court is obliged to uphold a discretionary decision of a trial court, if it can conclude ab initio that there are facts of record which would support the trial judge's decision had discretion been exercised on the basis of those facts." Schmid v. Olsen, 111 Wis. 2d 228, 237, 330 N.W.2d 547 (1983) (citing Maier Constr., Inc. v. Ryan, 81 Wis. 2d 463, 473, 260 N.W.2d 700 (1978)).
¶ 194. The discussion above pertains to Hauser personally, as a director and officer. But the corporation also was entitled to representation, because the circuit court determined that Evald Moulding was "more than a nominal party." Dr. Ehlinger's suit was, in part, a suit for declaratory judgment to determine the rights of the parties under the Buy-Sell agreement. The corporation was explicitly mentioned in the Buy-Sell Agreement and given authority to buy shares. More important, Dr. Ehlinger's suit was intended to dissolve the corporation. Corporate dissolution is not automatic. Dickman v. Vollmer, 2007 WI App 141, ¶ 27, 303 Wis. 2d 241, 736 N.W.2d 202. When the court appoints a receiver, however, the receiver may be paid "from the assets of the corporation." Wis. Stat. § 180.1432(4).
¶ 195. A corporation is an entity "distinct and apart from its members or stockholders." Legion Clubhouse, Inc. v. City of Madison, 248 Wis. 380, 385, 21 N.W.2d 668 (1946). A corporation is treated as an entity separate from its stockholders "under all ordinary circumstances." Jonas v. State, 19 Wis. 2d 638, 644, 121 N.W.2d 235 (1963). These judicial pronouncements are grounded in the corporation statutes, which provide in Wis. Stat. § 180.0302:
*362General powers. Unless its articles of incorporation provide otherwise, a corporation has perpetual duration and succession in its corporate name and has the same powers as a natural person to do all things necessary or convenient to carry out its business and affairs, including but not limited to power to do all of the following:
(1) Sue and be sued, complain and defend in its corporate name.
....
(10) Conduct its business ... and exercise the powers granted by this chapter in or outside this state.
Wis. Stat. § 180.0302.
¶ 196. The corporation's power to sue and be sued and to defend in its corporate name necessarily entails the right to retain. and compensate counsel. In his complaint, Dr. Ehlinger asked the court to "dispose of [the corporation's] business." The corporation had the right to resist that request.
¶ 197. This court should not assume that, upon remand, a receiver will sell Evald Moulding, that Jon Hauser will purchase the corporation, and that Dr. Ehlinger will emerge from this litigation a much wealthier man. We do not know whether Hauser will have the means to purchase the business if he is forced to repay all attorney fees to the corporation. We do not know whether this corporation will survive in any form.
¶ 198. I believe the majority is incorrect on the facts and the law and is doing serious damage to Wisconsin's corporate indemnification statute. For the reasons herein stated, I respectfully dissent.
¶ 199. I am authorized to state that Justice MICHAEL J. GABLEMAN joins ¶¶ 159-198 of this opinion.

 Dr. Ehlinger does not point to any limitation on indemnification in Evald Moulding's articles of incorporation in this case.