Wan v. Cheng CA2/1, B335658

E&E Optics, Inc. (owned by Wan) sued former executive Eric Cheng for breach of fiduciary duty, fraud, and related claims, alleging corporate looting through a competing company (WK Vision).
E&E voluntarily dissolved and filed a certificate of dissolution with the Secretary of State, confirming complete wind-up of its affairs before trial began.
Eric Cheng moved to dismiss the case shortly before trial, arguing that, as a dissolved corporation, E&E lacked standing to continue the litigation.
The trial court agreed and dismissed E&E’s claims, ruling that a dissolved corporation cannot prosecute actions, only defend them.
Wan’s individual claims were dismissed on grounds she failed to bring a derivative action; only the disposition regarding E&E’s standing was appealed.

Issue	Plaintiff’s Argument	Defendant’s Argument	Held
Can a dissolved corporation prosecute lawsuits?	Dissolution does not prevent a suit under Corp. Code § 2010.	Dissolved corps. can only defend, not prosecute.	Dissolved corps. can prosecute actions as part of winding up.
Effect of certificate stating complete wind-up	Continuing winding up may occur even after dissolution; lawsuit remains asset.	Declaration precludes any further winding up; lawsuit not an asset.	Assets omitted remain with dissolved corporation per statute.
Interpretation of Corp. Code § 2010	Statute allows prosecution or defense of actions after dissolution.	Only allows defense, not prosecution, of suits.	Statute allows both prosecution and defense of actions.
Judicial estoppel re: Wan’s individual claims	N/A (not argued on appeal)	Claims were derivative, not individual.	Estoppel applies, but not outcome determinative here.

Boyle v. Lakeview Creamery Co., 9 Cal.2d 16 (Cal. 1937) (dissolved corporations may bring actions as part of winding up)
Peñasquitos, Inc. v. Superior Court, 53 Cal.3d 1180 (Cal. 1991) (dissolution is not corporate death, but retirement from active business)