Alabama § 10A-3A-8.32 Directors’ Liability for Unlawful Distributions

Alabama Statutes

§ 10A-3A-8.32 — Directors’ Liability for Unlawful Distributions

Alabama § 10A-3A-8.32

JurisdictionAlabama

Title 10AAlabama Business and Nonprofit Entities Code

Ch. 3AAlabama Nonprofit Corporation Law

Art. 8Directors and Officers

Div. CDirectors

This text of Alabama § 10A-3A-8.32 (Directors’ Liability for Unlawful Distributions) is published on Counsel Stack Legal Research, covering Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ala. Code § 10A-3A-8.32 (2026).

Text

(a)A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to Section 10A-3A-6.40 or Section 10A-3A-11.07 is personally liable to the nonprofit corporation for the amount of the distribution that exceeds what could have been distributed without violating Section 10A-3A-6.40 or Section 10A-3A-11.07 if the party asserting liability establishes that when taking the action the director did not comply with Section 10A-3A-8.30.

(b)A director held liable under subsection (a) for an unlawful distribution is entitled to:

(1)contribution from every other director who could be held liable under subsection (a) for the unlawful distribution; and

(2)recoupment from each person of the pro-rata portion of the amount of the unlawful distribution the p

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(a) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to Section 10A-3A-6.40 or Section 10A-3A-11.07 is personally liable to the nonprofit corporation for the amount of the distribution that exceeds what could have been distributed without violating Section 10A-3A-6.40 or Section 10A-3A-11.07 if the party asserting liability establishes that when taking the action the director did not comply with Section 10A-3A-8.30.
(b) A director held liable under subsection (a) for an unlawful distribution is entitled to:
(1) contribution from every other director who could be held liable under subsection (a) for the unlawful distribution; and
(2) recoupment from each person of the pro-rata portion of the amount of the unlawful distribution the person received, whether or not the person knew the distribution was made in violation of Section 10A-3A-6.40 or Section 10A-3A-11.07.
(c) A proceeding to enforce:
(1) the liability of a director under subsection (a) is barred unless it is commenced within two years after the date on which the distribution was made; or
(2) contribution or recoupment under subsection (b) is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under subsection (a).