ELR Citation: ELR 20649
No(s). 1:89cv29 (N.D. Ind. Nov 10, 1993)

The court denies a dissolved corporation's motion for summary judgment in a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) suit for contribution and response costs brought by the current owner of a contaminated site. In 1983, the deceased owner of 91% interest in the corporation passed to four testamentary trusts. In 1987, the corporation sold its remaining assets, passed a resolution of dissolution, and filed a Corporate Dissolution of Liquidation Form with the Internal Revenue Service. The following year, the corporation assigned the consideration it received under the purchase-and-sale agreement to various persons, including the trustees of the four trusts. In 1990, the Indiana Secretary of State issued a certificate of administrative dissolution to the corporation because it failed to file an annual report or pay its annual dues.

Applying Indiana law, the court first holds that the dissolved corporation is liable to its creditors, including the current owner of the contaminated site, because it did not effect a proper voluntary dissolution and failed to give its creditors notice of its dissolution. The court holds that where a corporation has not properly dissolved pursuant to state law, it will always be amendable to suit under CERCLA, and is not entitled to the state's statute of limitations for creditor actions against dissolved corporations. The administrative dissolution merely prevents the corporation from carrying on any business except that necessary to wind up, but does not wipe out its corporate existence and does not bar creditors' claims. The court next holds that the corporation may be held liable under CERCLA. CERCLA allows suits against a corporation without limitation as to whether the corporation is dissolved or its assets have been distributed. The court holds that summary judgment would not be appropriate because genuine issues of material fact remain as to whether the corporation has distributed all its assets, whether it continues to conduct business, and whether the conveyance to the trusts was intended to defraud the corporation's creditors.

[A related decision is published at 24 ELR 20087.]

Counsel for Plaintiffs
Percy Angelo
Mayer, Brown & Platt
190 S. La Salle St., Chicago IL 60603 (312) 782-0600

Counsel for Defendant
Edmund B. Moran Jr.
53 W. Jackson Blvd., Ste. 718, Chicago IL 60604
(312) 408-1544