Virginia Law

Article 2. Foreclosure Sales and Dissolution.

If a sale be made under a deed of trust or mortgage, executed by a public service corporation, on all its works and property, and there be a conveyance pursuant thereto, such sale and conveyance shall pass to the purchaser at the sale not only the works and property of the company as they were at the time of making the deed of trust or mortgage, but any works which the company may, after that time and before the sale, having constructed, and all other property of which it may be possessed at the time of the sale other than debts due to it. Upon such conveyance to the purchaser, the company shall ipso facto be dissolved, and the purchaser shall become a corporation by any name which may be set forth in the conveyance, upon complying with the provisions of § 13.1-604.1.

Code 1919, § 3895.

The corporation created by or in consequence of such sale and conveyance shall succeed to all such franchises, rights, and privileges, and perform all such duties as would have been had or should have been performed by the first company but for such sale and conveyance, including in the case of a railroad corporation the duty of maintaining and operating any branch or lateral road which may have been constructed and operated before the sale, and of transporting freight and passengers thereon; save only, that the corporation so created shall not be entitled to the debts due to the first company, and shall not be liable for any debts of, or claims against, the first company, which may not be expressly assumed in the contract of purchase, and that the whole profits of the business to be done by such corporation shall belong to the purchaser or his assigns. The interest in the corporation of the purchaser or his assigns shall be personal estate, and he or his assigns may create so many shares of stock therein as he or they may think proper, not exceeding together the amount of stock in the first company at the time of the sale, except in pursuance of an amendment to the charter obtained according to law; and such purchaser or his assigns may assign such shares in a book to be kept for that purpose. Such shares shall thereupon be on the footing of shares in corporations generally, except only that the first meeting of the stockholders shall be held on such day and at such place as shall be fixed by the purchaser, of which notice shall be published for two successive weeks in a newspaper.

Code 1919, § 3896.

The debts due to and by, and claims against, the corporation whose works and property are so sold, shall be subject to the provisions contained in § 56-13, and the corporation, notwithstanding its dissolution, shall, as to such debts and claims, have the power and perform the duties prescribed by that section and be served with process as therein provided.

Code 1919, § 3897; 1920, p. 20.

The works and property of a public service corporation sold under a decree of a court having competent jurisdiction shall be held by the purchaser thereof subject to all the provisions of §§ 56-9 through 56-11, so far as the same may be applicable to such a sale.

Code 1919, § 3898.

When any public service corporation shall expire or be dissolved, or its corporate rights and privileges shall have ceased, all of its works and property, and debts due to it, shall be subject to the payment of debts due by it, and then to distribution among the members or stockholders, according to their respective interests. Such corporation may sue and be sued as before for the purpose of collecting debts due to it, prosecuting rights under previous contracts with it, enforcing its liability, and distributing the proceeds of its works, property, and debts among those entitled thereto. Notice to or process against such company, if necessary in any suit or civil proceeding, shall be sufficiently served by publication thereof once a week for four successive weeks in some newspaper published in the county or corporation wherein the suit or proceeding is; or, if there be no newspaper published in such county or corporation, in a newspaper published in some neighboring county or corporation in this Commonwealth, to be designated by the clerk of the court in which such suit or proceeding is.

Code 1919, § 3899.