McKenzie v. Eastern Iowa Tire, Inc.

SCHULTZ, Justice.

In 1984 Robert McKenzie brought an action to liquidate the assets of Eastern Iowa Tire, Inc. (Eastern) pursuant to Iowa Code section 496A.94. McKenzie and John A. Carver each owned fifty percent of the corporate stock. In his petition McKenzie alleged that the directors and shareholders were deadlocked, the corporate assets were misapplied or wasted, and the corporation had a negative net worth. He asked the court to appoint a liquidating receiver. Eastern resisted the appointment.

In early 1985, however, the nature of the proceeding changed. Carver agreed to purchase…