Corporations – Dissolution – Equity Power to Dissolve Going Concern for Dissension
The stock in a hotel management corporation was divided equally between two families, each of which had for some years been unable to agree or cooperate with the other in the management of the business. As a result of this dissension, no meeting of stockholders or directors was held for some years, no withdrawals of profits had been possible for six years, and the corporation had been operated at a loss for the year prior to suit. While the concern was not insolvent, such a financial state was allegedly imminent, the business of the corporation was admittedly poorly managed and its property was in need of repair. In view of these facts the owners of one half the stock brought an action for dissolution of the corporation in equity. From an order granting dissolution and dismissing a cross-bill for specific performance of an option to buy plaintiff’s stock, defendants appealed. Held, affirmed. Neither a showing of insolvency nor statutory authorization is necessary for equity to act when dissension is accompanied by “financial loss, corporate paralysis, mismanagement and deterioration of property.” Levant v. Kowal, 350 Mich. 232, 86 N.W. (2d) 336 (1957).