Williams v. Calypso Wireless, Inc., C.A. No. 7140-VCL (Del. Ch. Feb. 8, 2012)
The Delaware Court of Chancery took the extraordinary step of appointing a receiver to dissolve a publicly traded corporation that was essentially defunct, under Section 322 of the Delaware General Corporation Law (the “DGCL”), which by its terms allows the Court of Chancery to appoint a receiver where a corporation fails to follow a court order. In this case, Calypso Wireless, Inc. (“Calypso”) had failed to hold an annual meeting since 2002 despite being ordered to hold a meeting in 2008. While the plaintiff in this action merely sought the appointment of a receiver to hold a meeting of stockholders, the Court ordered Calypso to be dissolved because of its flagrant violation of Delaware law and apparent violation of federal securities laws. Calypso had not filed an annual report on Form 10K in nearly four years, had no income or revenues and was likely insolvent on a balance sheet basis. Accordingly, the Court determined that there was no realistic possibility that Calypso could comply with the meeting order even under the direction of a receiver. However, the Court proceeded with the appointment of a receiver solely in order to dissolve the company.
