§ 7-128-403 — Liability of directors for unlawful distributions

Colorado § 7-128-403

• Jurisdiction: Colorado
• Title 07: Corporations
• Art.: Directors and Officers

Text

(1) A director
who votes for or assents to a distribution made in violation of section 7-133-101 or
the articles of incorporation is personally liable to the nonprofit corporation for the
amount of the distribution that exceeds what could have been distributed without
violating said section or the articles of incorporation if it is established that the
director did not perform the director's duties in compliance with section 7-128-401.
In any proceeding commenced under this section, a director shall have 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 person who accepted the distribution knowing the distribution
was made in violation of section 7-133-101 or the articles of incorporation, the
amount of the contribution from such person being the amount of the distribution to
that person that exceeds what could have been distributed to that person without
violating section 7-133-101 or the articles of incorporation.

Legislative History

Source: L. 97: Entire article added, p. 699, � 3, effective July 1, 1998.