During voluntary termination of a C corporation, which party has a remedy if assets are wasted or there is bad faith?

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Fiduciary duties during winding up. When a corporation voluntarily terminates, assets are distributed first to creditors and then to shareholders. If those assets are wasted or the dissolution is pursued in bad faith, those in control (the directors and officers) have breached their fiduciary duties to the corporation and its owners. The remedy for that breach lies with the shareholders, who can bring a direct or derivative action to recover the losses or to unwind improper acts in the dissolution process. Creditors don’t hold a separate remedy in this context for mismanagement in winding up, and the government isn’t the party aligned with enforcing these internal fiduciary breaches in this scenario.