Document: Texas Eastern Overseas, Inc., C.A. No. 4326-VCN, Noble, V.C. (Del. Ch. Nov. 30, 2009)

Petitioner Ameripride Services sought the appointment of a receiver under Section 279 of the DGCL for Texas Eastern Overseas (“TEO”), a dissolved corporation, to maintain a lawsuit and pursue potential insurance coverage.  TEO moved to dismiss the petition on the grounds that because it was dissolved for more than 3 years under Section 278 of the DGCL it could not be sued and Section 279 could not be used to defeat that time limit, particularly in the case where TEO has no assets.  Ameripride sought judgment on the pleadings as to its petition.  The Court denied TEO’s motion to dismiss and granted Ameripride’s motion finding that Ameripride had made a showing that TEO had undistributed assets warranting appointment of a receiver and that the policies underlying Section 278’s time limitation would only be minimally implicated.  The Court stated that the receiver would not have a claim to assets of TEO distributed in the dissolution of TEO or a claim against its former shareholders, directors or officers, but only to potential insurance coverage which might be available as a result of pending litigation.