In March 1981, the Attorney General (P) instituted proceedings against Surrogate Parenting Associates, Inc. (D) for abuse and misuse of its corporate powers. P alleged that D's surrogate procedures violated Kentucky law. D operated a clinic that assisted infertile couples in obtaining a child related to the husband through artificial insemination of a surrogate mother. The parental rights of the surrogate were then terminated upon birth leaving the biological father with custody. The surrogate mother freely contracted away her claims to the child. The surrogate mother received a fee partly paid before delivery, and the remainder is paid after judgment and voluntary termination of parental rights by the surrogate. D is paid a fee of assisting all parties involved in the transaction. Each party must be represented by legal counsel. The trial court held that D's activities were not illegal and not an abuse of corporate powers and dismissed the complaint. The court of appeals reversed.

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