SB3264 98TH GENERAL ASSEMBLY

LRB098 17689 JLS 52803 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB3264

Introduced 2/14/2014, by Sen. William R. Haine

SYNOPSIS AS INTRODUCED:

805 ILCS 5/12.30	from Ch. 32, par. 12.30
805 ILCS 5/12.80	from Ch. 32, par. 12.80

Amends the Business Corporation Act of 1983. Provides that upon a corporate dissolution any policy of liability insurance covering acts and omissions of the dissolved corporation committed during the corporation's existence shall be held in trust for the benefit of any injured party. Provides that any policy shall be held in trust for as long as there is unexhausted coverage applicable to acts or omissions of the corporation. Modifies the time within which an action may be brought when unexhausted liability coverage is in effect. Effective immediately.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Business Corporation Act of 1983 is amended by changing Sections 12.30 and 12.80 as follows:

(805 ILCS 5/12.30) (from Ch. 32, par. 12.30)

Sec. 12.30. Effect of dissolution. (a) Dissolution of a corporation terminates its corporate existence and a dissolved corporation shall not thereafter carry on any business except that necessary to wind up and liquidate its business and affairs, including:

(1) Collecting its assets;

(2) Disposing of its assets that will not be distributed in kind to its shareholders;

(3) Giving notice in accordance with Section 12.75 and discharging or making provision for discharging its liabilities;

(4) Distributing its remaining assets among its shareholders according to their interests; and

(5) Doing such other acts as are necessary to wind up and liquidate its business and affairs.

(b) After dissolution, a corporation may transfer good and merchantable title to its assets as authorized by its board of directors or in accordance with its by-laws.

(c) Dissolution of a corporation does not:

(1) Transfer title to the corporation's assets;

(2) Prevent transfer of its shares or securities, provided, however, the authorization to dissolve may provide for closing the corporation's share transfer books;

(3) Effect any change in the by-laws of the corporation or otherwise affect the regulation of the affairs of the corporation except that all action shall be directed to winding up the business and affairs of the corporation;

(4) Prevent suit by or against the corporation in its corporate name;

(5) Abate or suspend a criminal, civil or any other proceeding pending by or against the corporation on the effective date of dissolution.

(d) To the extent that there is a policy of liability insurance providing coverage for the acts or omissions of the dissolved corporation, committed during its existence, that is in effect at the time of dissolution:

(1) if ownership of the policy is transferred as an asset by any means, including as part of a sale of assets or as part of distribution, the transferee shall hold the policy as trustee for the benefit of any person injured by any covered act or omission;

(2) if no provision is made for the transfer of ownership of the policy, the corporation shall appoint a trustee to hold the policy for the benefit of any person injured by any covered act or omission;

(3) if no provision is made for the transfer of ownership of policy and the corporation fails to appoint a trustee, any shareholder receiving a distribution of assets shall be deemed a de facto trustee to hold the policy for the benefit of any person injured by any covered act or omission;

(4) the policy shall be held in trust for as long as there is unexhausted coverage applicable to acts or omissions of the corporation during its existence, regardless of when any injury occurs or manifests.

(Source: P.A. 85-1344.)

(805 ILCS 5/12.80) (from Ch. 32, par. 12.80)

Sec. 12.80. Survival of remedy after dissolution.

(a) The dissolution of a corporation either (1) by filing articles of dissolution in accordance with Section 12.20 of this Act, (2) by the issuance of a certificate of dissolution in accordance with Section 12.40 of this Act, (3) by a judgment of dissolution by a circuit court of this State, or (4) by expiration of its period of duration, shall not take away nor impair any civil remedy available to or against such corporation, its directors, or shareholders, for any right or claim existing, or any liability incurred, prior to such dissolution if action or other proceeding thereon is commenced within 5 five years after the date of such dissolution. Any such action or proceeding by or against the corporation may be prosecuted or defended by the corporation in its corporate name.

(b) Civil remedies for injuries caused by acts and omissions of a dissolved corporation that are the subject of unexhausted liability insurance coverage remaining in trust, as provided in Section 12.30, may be brought beyond the 5-year provided in this Section for as long as there remains unexhausted coverage.

(1) In any action for a civil remedy under this Section that is initiated beyond the 5-year limit, the claimant or injured party's remedy or recovery shall be limited to the policy proceeds. Nothing in this Section alters or amends the ability or inability of an injured party or claimant to obtain recovery from the officers, directors, shareholders, or successors of a dissolved corporation.

(2) Any action under this Section is subject to all generally applicable statutes of limitation and repose. Nothing contained in this Section intended to extend or excuse any period of limitation or repose other than the limited exception to the 5-year period for claims or against dissolved corporation specified in this Section.

(Source: P.A. 92-33, eff. 7-1-01.)

Section 99. Effective date. This Act takes effect upon becoming law.