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Too Many Heads in the Corporate Kitchen

I have a corporation checking account with a bank. I discovered that another account in the same bank was opened in the corporation's name. The bank requested a resolution, which I delivered to them showing that the director who opened the new account was removed as director from the corporation, and then requested that the account be closed. The bank refused to close it and is now requesting a court order. Is this legal?


It appears that your corporation is undergoing the equivalent of a palace coup. Assuming that the director that was removed is disputing that fact and has provided the bank with some form of documentation for his claim, that leaves the bank with conflicting claims for control of the account, and it cannot tell which is legitimate.

Unless the corporation can sort out the claims to provide the bank with clear direction to which no one (neither you nor the competing director) objects, the bank is left with no choice but to request that a court decide who controls the account. That keeps the bank protected from liability for a wrong choice.

Published on BankingQuestions.com 6/16/09