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At issue in this case was the construction of Mass. 156D, 14.30, the corporate dissolution statute, which allows a shareholder to petition a judge of the superior court to dissolve a corporation in the event of a deadlock between its directors. Plaintiff and Defendant were the sole shareholders and directors of a corporation. Plaintiff filed a petition pursuant to the corporate dissolution statute seeking to dissolve the corporation. After a jury-waived trial, Plaintiff also filed a separate claim for contempt of court. Defendant counterclaimed.
A judge rejected all of Plaintiff’s claims and Defendant’s counterclaims. The Supreme Judicial Court remanded the matters, holding (1) the impasse as to fundamental matters of corporate governance and operations existing under these circumstances gave rise to a state of “true deadlock” such that the remedy of dissolution provided by the statute was allowable; (2) because dissolution is a discretionary remedy, the superior court must make a determination as to whether it is the appropriate remedy under the circumstances; and (3) the superior court must consider the allegations raised in the complaint for contempt concerning conduct that occurred after the trial. NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA; (617) 5571030; SJCReporter@sjc.state.ma.us SJC-12222 GEORGE T.
KOSHY Middlesex. ANUPAM SACHDEV. - September 14, 2017. Gants, C.J., Lenk, Hines, Gaziano, Lowy, Budd, & Cypher, JJ.1 Corporation, Dissolution, Officers and agents. Practice, Civil, Civil action commenced in the Superior Court Department on June 28, 2012. The case was heard by Bruce R.
Henry, J., and a complaint for contempt, filed on March 2, 2015, was also heard by him. The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court. Waters for the plaintiff. Maureen Mulligan (Timothy M. Pomarole also present) for the defendant. Carey, Jr., for Brian JM Quinn & others, amici curiae, submitted a brief. 1 We are called upon in this case to construe for Justice Hines participated in the deliberation on this case prior to her retirement.
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2 the first time G. 156D, § 14.30, the corporate dissolution statute. That statute allows a shareholder to petition a judge of the Superior Court to dissolve a corporation in the event of a deadlock between its directors. 156D, § 14.30 (2) (i).
Koshy and Anupam Sachdev are the sole shareholders and directors of Indus Systems, Inc. After years of deepening dissension and acrimony between the two, Koshy filed a petition in the Superior Court in 2012, pursuant to the corporate dissolution statute, seeking to dissolve Indus. Koshy also brought claims against Sachdev for breach of fiduciary duties and, after a jury-waived trial had taken place, but prior to the issuance of the judge's decision, filed a separate claim for contempt of court. The judge rejected all of Koshy's claims and Sachdev's counterclaims, and dismissed Koshy's complaint for contempt. Koshy appealed, and we transferred the matter to this court on our own motion. We conclude that the utter impasse as to fundamental matters of corporate governance and operations shown to exist in these circumstances gave rise to a state of 'true deadlock' such that the remedy of dissolution provided by the statute is permissible. See comment to G.