§ 7-108-405 — Liability of directors for unlawful distributions

(1) A director
who votes for or assents to a distribution made in violation of section 7-106-401 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
section 7-106-401 or the articles of incorporation if it is established that the director
did not perform the director's duties in compliance with section 7-108-401. In any
proceeding commenced under this section, a director has all of the defenses
ordinarily available to a director.

(2) A director held liable under subsection (1) of this section for an unlawful
distribution is entitled to contribution:

(a) From every other director who could be held liable under subsection (1) of
this section for the unlawful distribution; and

(b) From each shareholder who accepted the distribution knowing the
distribution was made in violation of section 7-106-401 or the articles of
incorporation, the amount of the contribution from the shareholder being the
amount of the distribution to that shareholder that exceeds what could have been
distributed to that shareholder without violating section 7-106-401 or the articles of
incorporation.

Legislative History

Source: L. 2019: Entire part amended with relocations, (SB 19-086), ch. 166, p. 1933, � 35, effective July 1, 2020.