35-14-832. Director's liability for unlawful distributions.
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35-14-832 . Director's liability for unlawful distributions.
(1)A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to 35-14-640
(1)or 35-14-1409
(1)is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating 35-14-640
(1)or 35-14-1409
(1)if the party asserting liability establishes that when taking the action the director did not comply with 35-14-830 .
(2)A director held liable under subsection
(1)for an unlawful distribution is entitled to:
(a)contribution from every other director who could be held liable under subsection
(1)for the unlawful distribution; and
(b)recoupment from each shareholder of the pro rata portion of the amount of the unlawful distribution the shareholder accepted knowing the distribution was made in violation of 35-14-640
(1)or 35-14-1409 (1).
(3)A proceeding to enforce:
(a)the liability of a director under subsection
(1)is barred unless it is commenced within 2 years after the date:
(i)on which the effect of the distribution was measured under 35-14-640
(5)or (7);
(ii)as of which the violation of 35-14-640
(1)occurred as the consequence of disregard of a restriction in the articles of incorporation; or
(iii)on which the distribution of assets to shareholders under 35-14-1409
(1)was made; or
(b)contribution or recoupment under subsection
(2)is barred unless it is commenced within 1 year after the liability of the claimant has been finally adjudicated under subsection (1).