Court Opinion

ID: 9522385
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:24:29.63506+00
Date Added: 2024-06-11T13:02:41.951927
License: Public Domain

AMUNDSON, Justice
(concurring specially)-
This record is void of any evidence that Hickok’s was “insolvent, or is in imminent danger of insolvency, or ... unable to exercise its corporate functions because of continual dissention ...” as required by SDCL 21-21-3 when a trial court is considering whether or not to appoint a receiver. This case certainly shows a closely held corporation’s board of directors who, due to their own personal interests, are incapable of settling the numerous lawsuits involving the corporation, individual directors, and shareholders. However, notwithstanding this litigation, Hickok’s continues to function in the daily operation of the gaming business. The fact that these individuals have, due to their own personal interests, deadlocked the corporation from settling these lawsuits does not, in my opinion, constitute a sufficient basis for the trial court to appoint a litigation receiver.
The Indiana Court of Appeals stated in Crippen Printing Corp. v. Abel, 441 N.E.2d 1002, 1007 (Ind.App.1982), as ‘follows:
We hold this appointment of a receiver is appropriate only where there is dissention between sets of stockholders owning equal amounts of stock such that there is a present danger to investors consisting of a serious suspension of or interference with the conduct of the business resulting in an imminent danger of dissipation of the corporate assets.
If, in fact, there was imminent danger of Hickok’s assets being dissipated so that it was on the brink of insolvency, I am sure such facts could have easily been submitted for the trial court’s consideration. Without such evidence, I would hold that it was inap*390propriate to appoint the receiver in this case. The statute does not provide for appointment of a receiver as a substitute for resolving disputes between the owners of a corporation in lieu of the parties’ right to have a jury decide the underlying legal controversy.
These litigious parties are obviously expending money which otherwise could be used to pay dividends.
Still, unless the corporation cannot pay its bills, the courts should not be used as a vehicle to protect individuals from exercising what appears to be unsound business acumen.