271 So. 3d 328
La. Ct. App.2019Background
- KLL (Krebs, Lasalle, Lemieux Consultants, Inc.) dissolved by shareholder affidavit in December 2012 under the pre-2015 Business Corporation Law (La. R.S. 12:142.1).
- G.E.C., Inc. executed a promissory note to KLL in 2011; KLL alleges GEC defaulted beginning June 2013 and sought to enforce the note.
- KLL filed suits in 2013 and 2015; courts dismissed KLL’s claims for lack of a right of action because KLL had dissolved by affidavit and lost inchoate claims (this Court affirmed in Krebs I).
- KLL sought and obtained reinstatement of corporate status in 2017 (effective May 12, 2016) pursuant to the repealed law after this Court’s remand in Krebs II. The trial court later denied KLL’s 2018 enforcement suit against GEC via exception of no right of action.
- The core legal question: whether (and under what law) KLL’s 2016 reinstatement revives the right to enforce inchoate claims that allegedly arose after dissolution (the 2013 default).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether La. R.S. 12:1-1444(H) (new 2015 Business Corporation Act) makes KLL’s 2016 reinstatement retroactive to negate the 2012 dissolution | KLL: reinstatement under 12:1-1444(H) is retroactive; current law governs an active corporation so reinstatement should be treated "as if termination never occurred" | GEC: new Act is substantive and prospective; prior law governs rights arising from pre-2015 events | Court: New Act is prospective; prior Business Corporation Law governs the 2012 dissolution and 2013 events; 12:1-1444 does not revive KLL’s inchoate claims |
| Whether reinstatement under the prior law revives inchoate claims extinguished by dissolution by affidavit (La. R.S. 12:142.1) | KLL: reinstatement should be retroactive or prior jurisprudence is wrong; reinstatement should restore the right to sue | GEC: dissolution by affidavit under 12:142.1 extinguished inchoate claims; reinstatement is prospective only | Court: Under pre-2015 law, dissolution by affidavit waived inchoate claims and reinstatement is prospective only; KLL’s right was extinguished |
| Whether Fourth Circuit cases interpreting 12:142.1 (Gendusa/Robertson/Leader Buick) are wrongly decided and should be repudiated | KLL: prior Fourth Circuit jurisprudence misreads statutes and should be overturned | GEC: prior jurisprudence correctly interprets statutory scheme and legislative placement; no basis to repudiate | Court: Declined to repudiate; found prior jurisprudence sound and applicable |
| Whether La. R.S. 12:163(E) (retroactive reinstatement for revoked charters) applies to voluntary dissolution by affidavit | KLL: 12:163(E) provides retroactive reinstatement "as though revocation never occurred" and should apply | GEC: 12:163 addresses Secretary of State revocation (punitive), not voluntary dissolution; does not apply | Court: 12:163(E) does not apply to voluntary dissolution by affidavit; argument fails |
Key Cases Cited
- Krebs, Lasalle, Lemieux Consultants, Inc. v. G.E.C., Inc., 197 So.3d 829 (La. App. 5 Cir. 2016) (affirming that pre-2015 law governed and inchoate claims were lost upon dissolution by affidavit)
- In Re Krebs, Lasalle, Lemieux Consultants, Inc., 215 So.3d 939 (La. App. 5 Cir. 2017) (reinstatement proceedings governed by prior law where corporation was not in existence on Jan. 1, 2015)
- Gendusa v. City of New Orleans, 635 So.2d 1158 (La. App. 4 Cir. 1994) (dissolution by affidavit does not preserve inchoate claims)
- Robertson v. Weinmann, 782 So.2d 38 (La. App. 4 Cir. 2001) (reinstatement after dissolution by affidavit is prospective; inchoate claims are extinguished)
- Leader Buick, GMC Trucks, Inc. v. Weinmann, 841 So.2d 34 (La. App. 4 Cir. 2003) (reinstatement does not revive extinguished inchoate claims)
- In Re Reinstatement of Venture Assocs., Inc. of La., 906 So.2d 498 (La. App. 1 Cir. 2005) (distinguishes retroactive reinstatement when suit was pending before dissolution from cases involving inchoate claims)
- In re Islander Shipholding, Inc., 715 So.2d 7 (La. App. 5 Cir. 1998) (allowed retroactive reinstatement where corporation had pending arbitration prior to dissolution)