Colorado § 7-56-714 - Grounds for judicial dissolution.

§ 7-56-714. Grounds for judicial dissolution.

(1) A cooperative may be dissolved in a proceeding brought in court by the attorney general if it is established that:

(a) The cooperative obtained its organization through fraud; or

(b) The cooperative has exceeded or abused the authority conferred upon it by law.

(2) A cooperative may be dissolved in a proceeding brought in court by not less than ten percent of the total number of members if it is established that:

(a) The directors are deadlocked in the management of the cooperative's affairs, the members are unable to break the deadlock, and irreparable injury to the cooperative is threatened or suffered, or the business and affairs of the cooperative can no longer be conducted to the advantage of the members generally;

(b) The directors or those in control of the cooperative have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent; or

(c) The members are deadlocked in voting power and have failed for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired or would have expired upon the election of their successors.

(3) A cooperative may be dissolved in a proceeding brought in court by a creditor if it is established that:

(a) A creditor's claim has been reduced to judgment, the execution on the judgment has been returned unsatisfied, and the cooperative is insolvent; or

(b) The cooperative is insolvent and the cooperative has admitted in writing that a creditor's claim is due and owing.

(4) (a) If a cooperative has been dissolved by voluntary action taken under sections 7-56-701 to 7-56-705:

(I) The cooperative may bring a proceeding in court to wind up and liquidate its business and affairs under judicial supervision in accordance with section 7-56-716; or

(II) The attorney general, a member, or a creditor, as the case may be, may bring a proceeding in court to wind up and liquidate the business and affairs of the cooperative under judicial supervision in accordance with section 7-56-716, upon establishing the grounds set forth for such person, respectively, in subsections (1) to (3) of this section.

(b) As used in sections 7-56-715 to 7-56-717, a "proceeding to dissolve the cooperative" includes a proceeding brought under this subsection (4), and a "decree of dissolution" includes an order of court entered in a proceeding under this subsection (4) that directs that the business and affairs of a cooperative be wound up and liquidated under judicial supervision.

Source: L. 96: Entire article R&RE, p. 531, § 1, effective July 1. L. 2003: IP(4)(a) amended, p. 2234, § 106, effective July 1, 2004. L. 2004: (4)(b) amended, p. 1420, § 64, effective July 1. L. 2005: IP(4)(a) amended, p. 1218, § 27, effective October 1. L. 2006: IP(4)(a) amended, p. 849, § 6, effective July 1.