If a shareholder of a closely held corporation sues to dissolve the corporation under Corp. Code 1800, another shareholder may invoke the appraisal procedure under Corp. Code 2000, which stays dissolution proceedings and results in a mandatory alternative decree dissolving the corporation unless the shareholder buys out the plaintiff’s shares for the price set by the appraisal process. Once the appraisal procedure is set in motion by a court order for an appraisal, the appraisal supersedes the cause of action for involuntary dissolution and the plaintiff can no longer voluntarily dismiss that claim in order to avoid the appraisal and buy-out of his shares. The trial court erred in allowing the plaintiff, in this case, to voluntarily dismiss his involuntary dissolution claim after the court had ordered an appraisal. Furthermore, the court’s subsequent order vacating its prior appraisal order and denying the appraisal motion as moot was an appealable order under Corp. Code 2000(c).
California Court of Appeal, Fourth District, Division 1 (Huffman, Acting P.J.); September 18, 2018; 27 Cal. App. 5th 259