B-149311, AUG. 6, 1962

B-149311: Aug 6, 1962

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ADVISED THAT YOU HAVE IN YOUR POSSESSION A TREASURY CHECK IN THE AMOUNT OF $1. YOU ARE ENTITLED TO FIFTY PERCENT OF THE REFUND AS YOUR FEE. WAS DISSOLVED IN ACCORDANCE WITH DELAWARE LAW BY PROCLAMATION BY THE GOVERNOR OF DELAWARE IN JANUARY 1959. YOU STATE THAT YOU HAVE BEEN ADVISED BY THE FORMER GENERAL COUNSEL OF THE CORPORATION THAT THERE ARE NO OFFICERS OF THE CORPORATION WHO COULD LEGALLY ENDORSE THE CHECK. YOU INQUIRE AS TO WHETHER THERE IS ANY COURSE OF ACTION WHEREBY YOU COULD SATISFY YOUR ATTORNEY'S LIEN OUT OF THE CHECK WITHOUT RESORTING TO COURT ACTION. APPARENTLY WAS DISSOLVED UNDER THE PROVISIONS OF 8 DEL.C. 511. WHILE DISSOLVED CORPORATIONS ARE CONTINUED IN EXISTENCE BY 8 DEL.C. 278 FOR THREE YEARS FOLLOWING DISSOLUTION FOR PURPOSES OF WINDING UP THEIR AFFAIRS.

B-149311, AUG. 6, 1962

TO SHARRETTS, PALEY AND CARTER, ESQUIRES:

YOUR LETTER OF JUNE 26, 1962, ADVISED THAT YOU HAVE IN YOUR POSSESSION A TREASURY CHECK IN THE AMOUNT OF $1,183.60 REPRESENTING A REFUND OF CUSTOMS DUTIES TO YOUR CLIENT, MICRO MOISTURE CONTROLS, INC. YOU STATE THAT UNDER YOUR RETAINER AGREEMENT WITH YOUR CLIENT, YOU ARE ENTITLED TO FIFTY PERCENT OF THE REFUND AS YOUR FEE. HOWEVER, MICRO MOISTURE CONTROLS, INC., A DELAWARE CORPORATION, WAS DISSOLVED IN ACCORDANCE WITH DELAWARE LAW BY PROCLAMATION BY THE GOVERNOR OF DELAWARE IN JANUARY 1959, FOR NONPAYMENT OF TAXES, AND YOU STATE THAT YOU HAVE BEEN ADVISED BY THE FORMER GENERAL COUNSEL OF THE CORPORATION THAT THERE ARE NO OFFICERS OF THE CORPORATION WHO COULD LEGALLY ENDORSE THE CHECK. HENCE, YOU INQUIRE AS TO WHETHER THERE IS ANY COURSE OF ACTION WHEREBY YOU COULD SATISFY YOUR ATTORNEY'S LIEN OUT OF THE CHECK WITHOUT RESORTING TO COURT ACTION.

MICRO MOISTURE CONTROLS, INC., APPARENTLY WAS DISSOLVED UNDER THE PROVISIONS OF 8 DEL.C. 511, WHICH AUTHORIZES THE GOVERNOR TO REPEAL BY FRANCHISE TAXES FOR TWO YEARS. WHILE DISSOLVED CORPORATIONS ARE CONTINUED IN EXISTENCE BY 8 DEL.C. 278 FOR THREE YEARS FOLLOWING DISSOLUTION FOR PURPOSES OF WINDING UP THEIR AFFAIRS, AND THIS PROVISION HAS EXPRESSLY BEEN HELD APPLICABLE BY DELAWARE COURTS TO CORPORATIONS DISSOLVED FOR NONPAYMENT OF FRANCHISE TAXES (TOWNSEND V. DELAWARE GLUE CO., 12 DEL.CH. 25, 103A 576; UNITED AUTOMATIC RIFLES CORP. V. JOHNSON 41 F.SUPP. 86), MORE THAN THREE YEARS HAVE ALREADY PASSED SINCE YOUR CLIENT'S DISSOLUTION. HOWEVER, 8 DEL.C. 279 PROVIDES AS FOLLOWS:

"WHEN ANY CORPORATION ORGANIZED UNDER THIS CHAPTER SHALL BE DISSOLVED IN ANY MANNER WHATEVER, THE COURT OF CHANCERY, ON APPLICATION OF ANY CREDITOR OR STOCKHOLDER OF THE CORPORATION, OR ON APPLICATION OF ANY PERSON OR LEGAL ENTITY WHO, IN THE COURT'S DESCRETION, SHOWS GOOD CAUSE THEREFOR, AT ANY TIME, MAY EITHER APPOINT ONE OR MORE OF THE DIRECTORS THEREOF TRUSTEES, OR APPOINT ONE OR MORE PERSONS TO BE RECEIVERS, OF AND FOR THE CORPORATION, TO TAKE CHARGE OF THE ESTATE AND EFFECTS THEREOF, AND TO COLLECT THE DEBTS AND PROPERTY DUE AND BELONGING TO THE CORPORATION, WITH POWER TO PROSECUTE AND DEFEND, IN THE NAME OF THE CORPORATION, OR OTHERWISE, ALL SUCH SUITS AS MAY BE NECESSARY OR PROPER FOR THE PURPOSES AFORESAID, AND TO APPOINT AN AGENT OR AGENTS UNDER THEM, AND TO DO ALL OTHER ACTS WHICH MIGHT THE POWERS OF THE TRUSTEES OR RECEIVERS MAY BE CONTINUED AS LONG AS THE COURT OF CHANCERY SHALL THINK NECESSARY FOR THE PURPOSES AFORESAID.'

THE ABOVE PROVISION HAS BEEN HELD APPLICABLE TO CORPORATIONS WHOSE CHARTERS HAVE BEEN REPEALED UNDER SECTION 511. HARNED V. BEACON HILL REAL ESTATE CO., 9 DEL.CH. 232, 80A 805, AFFIRMED 9 DEL.CH. 411, 84A 229. ALSO, IT HAS BEEN HELD THAT TRUSTEES OR RECEIVERS MAY BE APPOINTED FOR A DISSOLVED CORPORATION EVEN AFTER THE EXPIRATION OF THE THREE YEAR PERIOD PROVIDED BY 8 DEL.C. 278. ADDY V. SHORT, 81A 2D 300; LEVIN V. FISK RUBBER CORP., 33A 2D 546; HARNED V. BEACON HILL REAL ESTATE CO., SUPRA; SLAUGHTER V. MOORE, 9 DEL.CH. 350, 82A 963.

THE DELAWARE LAW THUS PROVIDES CLEARLY AND SPECIFICALLY FOR THE HANDLING OF ASSETS ACCRUING TO DISSOLVED CORPORATIONS, AND ANY ACTION ON SUCH ASSETS NOT IN CONFORMANCE THEREWITH WOULD BE OF QUESTIONABLE LEGAL VALIDITY. SINCE YOUR CLIENT, MICRO MOISTURE CONTROLS, INC., HAS BEEN DISSOLVED AND THE THREE YEAR PERIOD OF GRACE ESTABLISHED BY 8 DEL.C. 278 HAS EXPIRED, THE CHECK IN QUESTION MUST BE PAID ONLY TO A RECEIVER OR TRUSTEE APPOINTED UNDER THE PROVISIONS OF 8 DEL.C. 279 IN ORDER THAT THE UNITED STATES MAY OBTAIN A GOOD ACQUITTANCE FOR SUCH PAYMENT.