In a recent opinion, the Delaware Court of Chancery has appointed a receiver for an insolvent corporation whose shareholders were deadlocked on how to resolve a $1.9 million tax lien.
Vice Chancellor Donald F. Parsons Jr. appointed the receiver to determine the necessary steps to settle the tax lien along with any outstanding creditor and shareholder claims against Metropolitan Hospice Inc., a Delaware corporation, which operated a hospice in Atlanta.According to court documents, the hospice was founded in 2001 by Errol Duncan and Sousan Badii, who died in 2010. Badii was the company’s largest shareholder and upon her death, her shares were transferred to her estate, which is managed by her brother, Ramin Badii. However, under MHI’s shareholder agreement, all voting rights attached to the shares terminate upon an owner’s death. Therefore, Sousan Badii’s estate is MHI’s largest shareholder with 52 percent of the company’s common stock, but none of that stock includes voting rights.
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