RS 1-833 - Directors' liability for unlawful distributions
A. A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to R.S. 12:1-640(A) or 1-1409(A) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating R.S. 12:1-640(A) or 1-1409(A) if the party asserting liability establishes that when taking the action the director did not comply with R.S. 12:1-830.
B. A director held liable under Subsection A of this Section for an unlawful distribution is entitled to both of the following:
(1) Contribution from every other director who could be held liable under Subsection A of this Section for the unlawful distribution.
(2) Indemnity from each shareholder, for the pro-rata portion of the amount of the unlawful distribution the shareholder received.
C.(1) A proceeding to enforce the liability of a director under Subsection A of this Section is barred unless it is commenced within two years after the relevant one of the following dates:
(a) The date on which the effect of the distribution was measured under R.S.12:1-640(E) or (G).
(b) The date as of which the violation of R.S. 12:1-640(A) occurred as the consequence of disregard of a restriction in the articles of incorporation.
(c) The date on which the distribution of assets to shareholders under R.S. 12:1-1409(A) was made.
(2) A proceeding to enforce contribution or indemnity under Subsection B of this Section is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under Subsection A of this Section.
D. The time limits provided in Subsection C of this Section are peremptive.
Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.