Notice of Dissolution to Creditors and Claimants

The Ohio legislature recently passed House Bill 48, §1, which became effective on May 4, 2012.  House Bill 48 revised Ohio Revised Code §1701.87, which requires dissolving corporations to give notice to creditors and claimants.  Specifically, a dissolving corporation must give notice, by certified or registered mail, to each known creditor and each person that has a claim against the corporation, including claims that are conditional, un-matured, or contingent upon the occurrence or non-occurrence of future events. 

The notice required under Ohio Revised Code §1701.87 requires the dissolving corporation to provide the following information: 

1. That all claims be presented to the dissolving corporation in writing, identify the claimant, and contain sufficient information to reasonably inform the dissolving corporation of the substance of the claim;
2. The mailing address to which the creditor must send the claim;
3. The deadline, which shall not be less than 60 days after the date the notice was given, by which the dissolving corporation must receive the claim;
4. That the claim will be barred if the dissolving corporation does not receive the claim by the deadline previously set forth; and
5. That the dissolving corporation may make distributions to other creditors or claimants, including distributions to shareholders of the corporation, without further notice to the creditor.

Section (D) of Ohio Revised Code §1701.87 specifically provides that “A claim is barred if a claimant that was given written notice under Division (A) of this section does not deliver the claim to the dissolved corporation by the deadline stated in the notice.”

Further, the dissolving corporation is required to post the notice described in division (B) of Ohio Revised Code §1701.87 on any website the dissolving corporation maintains in the corporation’s name and shall provide a copy of the notice to the Secretary of State to be posted on its website. 

Division (G) requires that if the Certificate of Dissolution is filed within five years or less after the effective date of this amendment (May 4, 2012). The dissolving corporation must publish the notice described in division (B) of §1701.87 at least once a week for two successive weeks, in a newspaper published and of general circulation in the county in which the principal office of the corporation was to be or is located.

Finally, Ohio Revised Code §§1701.881 and 1701.882 set out the procedures to settle and payout claims made against the dissolving corporation.  These revisions place additional requirements upon dissolving corporations and require strict adherence by the dissolving corporation, as well as its board, officers, and shareholders.

Should you have any questions about this client alert, please contact Attorney Matthew R. Hunt at 330-497-0700 or mhunt@www.kwgd.com.

NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.