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Defunct Companies That Hold Record Title to Mining Properties: Problems and Solutions

Rodney D. Knutson, Proceedings of 24th Annual Rocky Mountain Mineral Law Institute (1978)

Some of the most frustrating of all legal problems are encountered when a mineral exploration company's landmen or attorneys discover that record title to a property that they are trying to acquire (or thought they had acquired) is held by a defunct corporation (one that is not then in good standing under the laws of the state where it incorporated).

If a corporation is defunct, a mechanism exists for disposing of its assets. Theoretically, the problems can be solved, but the time and expense of doing so may seem prohibitive. The immediate problem for the mineral exploration company is to determine who must consent before it can explore the property. Hopefully, exploration will be successful, so considerable thought should also be given to obtaining title security sufficient to proceed with development and production. This paper is an analysis of the major problems of dealing with defunct corporations. Solutions to these specific problems are used as the basis [378] for recommending a systematic approach to title evaluation designed to identify and minimize the effects of these and other types of title problems commonly faced by mineral exploration companies.

Presentations too numerous to cite have discussed various aspects of mineral title problems at previous Rocky Mountain Mineral Law Institutes. An entire special institute was devoted to mineral title pro