Directors' liability for unlawful distributions.

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47-1A-833. Directors' liability for unlawful distributions.

A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to §47-1A-640 or 47-1A-1409 is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating §47-1A-640 or 47-1A-1409 if the party asserting liability establishes that when taking the action the director did not comply with §§47-1A-830 and 47-1A-830.1. A proceeding to enforce the liability of a director under this section is barred unless it is commenced within two years after the date:

(1)On which the effect of the distribution was measured under §47-1A-640.2 or 47-1A-640.4;

(2)As of which the violation of §47-1A-640 occurred as the consequence of disregard of a restriction in the articles of incorporation; or

(3)On which the distribution of assets to shareholders under §47-1A-1409 was made.

Source: SL 2005, ch 239, §162.


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