Post-Dissolution Liabilities of Shareholders and Directors for Claims Against Dissolved Corporations

This Article initially will explore the nature and extent of shareholders' and directors' liabilities for contingent claims against the dissolved corporation by examining section 105 of the Model Business Corporation Act and the case law of those states that have adopted the Model Act.' Two purposes underlying the Model Act are uniformity and progressive resolution of issues inadequately resolved by the common law or earlier statutes. An exhaustive analysis of the case law under section 105 of the Model Act, however,reveals that both purposes have been frustrated, if not defeated. First, uniformity among jurisdictions, as well as within each Model Act state, is defeated by the overwhelming inconsistency in the case law. Litigants presently can choose precedent to support almost any position they seek to argue.

Moreover, section 105 itself does not resolve clearly any of the major post-dissolution liability issues. Its ambiguous language has furnished litigants and courts with little guidance in determining the legislatively intended answers to key issues.