Can shareholders of a dissolved corporation sue in the name of the dissolved corporation?

California, United States of America


The following excerpt is from Pacific Scene, Inc. v. Penasquitos, Inc., 250 Cal.Rptr. 651, 46 Cal.3d 407, 758 P.2d 1182 (Cal. 1988):

Section 2011(a) provides: "In all cases where a corporation has been dissolved, the shareholders may be sued in the corporate name of such corporation upon any cause of action against the corporation arising prior to its dissolution. This section is procedural in nature and is not intended to determine liability." (Italics added.) The shareholders argue that this language, by negative implication, evinces an intent to preclude actions against former shareholders for injuries arising after corporate dissolution, and thus that any corresponding equitable action must be similarly barred. "While equitable relief is flexible and expanding, its power cannot be intruded in matters that are plain and fully covered by positive statute, nor will a court of equity lend its aid to accomplish by indirection what the law or its clearly defined policy forbids to be done directly." (Marsh v. Edelstein (1970) 9 Cal.App.3d 132, 140-141, 88 Cal.Rptr. 26.)

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