355.426. Liability for unlawful distribution.

337 words·~2 min read·/mo/chapter-355/355-426

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

355.426. Liability for unlawful distribution. — 1. Except in reliance on information described in subsection 3 of this section, a director who votes for or assents to a distribution made in violation of this chapter is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating this chapter.

2. A director held liable for an unlawful distribution under subsection 1 of this section is entitled to contribution:

(1)From every other director who voted for or assented to the distribution without relying on the information described in subsection 3 of this section; and

(2)From each person who received an unlawful distribution for the amount of the distribution whether or not the person receiving the distribution knew it was made in violation of this chapter.

3. In discharging his duties a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(1)One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented;

(2)Legal counsel, certified public accountants or other persons as to matters the director reasonably believes are within the persons' professional or expert competence;

(3)A committee of the board of which the director is not a member, as to matters within its jurisdiction, if the director reasonably believes the committee merits confidence; or

(4)In the case of a public benefit corporation which is a church or convention or association of churches, religious authorities and ministers, priests, rabbis, or other persons whose positions or duties in the religious organization the director believes justify reliance and confidence and whom the director believes to be reliable and competent in the matters presented.

4. A director is not acting in good faith if the director has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection 3 of this section unwarranted.

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(L. 1994 H.B. 1095)

Effective 7-01-95