Suits Against Dissolved Corporations – Asbestosshoke2013
The Delaware Supreme Court permits suits against dissolved corporations through receiver or trustee.
The Delaware Supreme Court reversed a lower court’s grant of summary judgment and held that a dissolved corporation’s contingent rights under insurance policies are capable of vesting and a receiver must be appointed in order for the dissolved corporation to participate in claims against that dissolved corporation, even after the expiration of the 3-year period in 8 Del. C. § 278. A corporation that had been dissolved for more than 10 years had pending asbestos-related personal injury actions against it, and those tort claimants filed a petition for the appointment of a receiver to administer the corporation’s undistributed CGL insurance coverage. The Delaware Supreme Court found as follows: “We conclude that under 8 Del. C. § 279, contingent contractual rights, such as unexhausted insurance policies, constitute “property” of a dissolved corporation, so long as those rights are capable of vesting. We further hold that Delaware’s dissolution statutes impose no generally applicable statute of limitations that would time-bar claims against a dissolved corporation by third parties. Finally, we hold that the existence of the “body corporate” continues beyond the expiration of the statutory winding-up period of 8 Del. C. § 278 for purposes of conducting litigation commenced before the expiration of that period. But, for litigation commenced after the expiration of that statutory period, a dissolved corporation may act only through a receiver or trustee appointed under 8 Del. C. § 279.” In Re: Krafft-Murphy Co., No. 85-2013, (Del. Nov. 26, 2013).