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Effect of Reinstatement
Kansas City Chrome Shop, Inc. v. Smith, WD84407, decided May 3, 2022. The Missouri Court of Appeals affirmed the ruling that a Kansas corporation that had been administratively dissolved lacked standing to sue to recover alleged debts entered into before its was administratively dissolved. The corporation had been reinstated, which the court acknowledged revived its right, in general, to maintain a suit. However, the Kansas corporation law provides that only the rights and credits which belonged to the corporation at the time its articles of incorporation became forfeited and which were not disposed of prior to reinstatement shall be vested in the corporation after its reinstatement. In this case the rights the corporation claimed to have acquired did not vest in it upon reinstatement because they did not belong to it at the time of forfeiture.
Rights of Expelled Member
Chadwick v. Huntoon, No. SD36850, decided September 16, 2021. The Missouri Court of Appeals held that an expelled member retained his right to receive distributions from the LLC. The operating agreement provided that an expelled member was entitled to certain monthly payments. However the operating agreement did not say that those payments were in lieu of receiving distributions. Because the operating agreement was silent as to the effect of expulsion on the member’s interest in the LLC, the default rule of the LLC act had to be applied. And the default provision was that an expelled member was entitled to receive his distribution percentage as an assignee, although he could no longer participate in management.
Sherrer v. Boston Scientific Corporation, No. SC97465, decided October 13, 2020. The Missouri Supreme Court held that Sec. 491.50 of the Missouri Statutes, which provides that any criminal convictions may be proven to challenge the credibility of witnesses in a criminal or civil trial does not apply to corporations. Therefore the trial court did not err in preventing the introduction of evidence of the corporate defendant’s prior criminal convictions. The court based its decision on both the legislative history and context of the section.
Forum Selection Clause
Green v. Paz, 4:16 CV 1900, decided February 4, 2020. The federal court in Missouri enforced a Delaware corporation’s forum selection bylaw and transferred a shareholder derivative suit alleging state and federal claims to the federal court in Delaware. The suit could not be transferred to the state court because the bylaw required selection of a forum for an action as a whole and not for discrete claims and the Delaware state court did not have jurisdiction over the federal claim.
Important Notice for Foreign Insurance Companies Doing Business in Missouri
Foreign insurance companies that are authorized to do business in Missouri, or that are planning on applying for a certificate of authority to do business in Missouri, need to be aware of a change regarding the appointing of their registered agent.
Foreign insurance companies, as part of the registration process with the Missouri Division of Insurance, appoint the Division as the registered agent and provide a forwarding address. That has not changed. However, foreign insurance companies must now also provide the Missouri Secretary of State with the name of a registered agent that is not the Division of Insurance. The foreign insurance company’s registered agent can be an individual resident of Missouri or a domestic or foreign corporation (including a corporate service provider such as CT). Foreign insurance companies can provide the Secretary of State with the name of this registered agent at the time they file their Annual Registration Report with the Secretary of State.
Please contact CT Corporation to help facilitate the change for your business.