The directors of a Nevada corporation become trustees upon its dissolution. NRS 78.590(1). The creditors or stockholders may apply to the district court either to continue the directors trustees in office or appoint one or more persons to act as receivers. NRS 78.600. What happens when a director has resigned and is unwilling to continue service? This was the question addressed by the Nevada Supreme Court in Canarelli v. Eighth Jud. Dist. Ct., 127 Nev. Adv. Op. 72 (2011).

American West Homes, Inc. was a Nevada corporation. In 2004, it filed certificate of dissolution with the Nevada Secretary of State pursuant to NRS 78.580 and dissolved. After dissolution, some of its directors remained as trustees pursuant to NRS 78.585. The winding up process was not completed until March 2008. Thereafter, two groups of homeowners filed construction defect complaints against American West. These homeowners served their complaints on one American West’s former directors, a Mr. Lawrence Canarelli. Because Mr. Canarelli was no longer a director, the homeowners asked the court to appoint him as trustee. The court “reluctantly” did so and Mr. Canarelli petitioned the Nevada Supreme Court for a writ of mandamus directing the district court to set aside the appointment.