§ 10A-2-8.33 — Liability for Unlawful Distributions

Alabama § 10A-2-8.33

• Jurisdiction: Alabama
• Title 10A: Alabama Business and Nonprofit Entities Code
• Ch. 2: Business Corporations
• Art. 8: Directors and Officers
• Div. C: Standards of Conduct

Text

REPEALED IN THE 2019 REGULAR SESSION BY ACT 2019-94 EFFECTIVE JANUARY 1, 2020. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.
(a) Unless he or she complies with the applicable standards of conduct described in Section 10A-2-8.30, a director who votes for or assents to a distribution made in violation of this chapter or the articles of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating this chapter or the articles of incorporation.
(b) A director held liable for an unlawful distribution under subsection (a) is entitled to contribution:
(1) From every other director who voted for or assented to the distribution without complying with the applicable standards of conduct described in Section 10A-2-8.30, and
(2) From each shareholder for the amount the shareholder accepted knowing the distribution was made in violation of this chapter or the articles of incorporation.
(c) A proceeding under subsection (a) is barred unless it is commenced within three years after the date on which the effect of the distribution was measured under Section 10A-2-6.40.

Legislative History

(Acts 1994, No. 94-245, p. 343, §1; §10-2B-8.33; amended and renumbered by Act 2009-513, p. 967, §120.)