Montana § 35-14-832 Director's Liability For Unlawful Distributions

Montana Statutes

§ 35-14-832 — Director's Liability For Unlawful Distributions

Montana § 35-14-832

Title 35CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

Ch. 14MONTANA BUSINESS CORPORATION ACT

Part 8Directors and Officers

This text of Montana § 35-14-832 (Director's Liability For Unlawful Distributions) is published on Counsel Stack Legal Research, covering Montana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Mont. Code Ann. § 35-14-832 (2026).

Text

35-14-832 . Director's liability for unlawful distributions.

(1)A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to 35-14-640 (1) or 35-14-1409 (1) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating 35-14-640 (1) or 35-14-1409 (1) if the party asserting liability establishes that when taking the action the director did not comply with 35-14-830 .

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

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

(b)recoupment from each shareholder of the pro rata portion of the amount of the unla

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35-14-832 . Director's liability for unlawful distributions. (1) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to 35-14-640 (1) or 35-14-1409 (1) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating 35-14-640 (1) or 35-14-1409 (1) if the party asserting liability establishes that when taking the action the director did not comply with 35-14-830 .
(2) A director held liable under subsection (1) for an unlawful distribution is entitled to:
(a) contribution from every other director who could be held liable under subsection (1) for the unlawful distribution; and
(b) recoupment from each shareholder of the pro rata portion of the amount of the unlawful distribution the shareholder accepted knowing the distribution was made in violation of 35-14-640 (1) or 35-14-1409 (1).
(3) A proceeding to enforce:
(a) the liability of a director under subsection (1) is barred unless it is commenced within 2 years after the date:
(i) on which the effect of the distribution was measured under 35-14-640 (5) or (7);
(ii) as of which the violation of 35-14-640 (1) occurred as the consequence of disregard of a restriction in the articles of incorporation; or
(iii) on which the distribution of assets to shareholders under 35-14-1409 (1) was made; or
(b) contribution or recoupment under subsection (2) is barred unless it is commenced within 1 year after the liability of the claimant has been finally adjudicated under subsection (1).