§ 35-2-423 — Removal Of Directors By Judicial Proceeding

35-2-423 . Removal of directors by judicial proceeding. (1) The district court for the judicial district of the county where a corporation's principal office is located or, if the principal office is not located in the state, Lewis and Clark County may remove any director of the corporation from office in a proceeding commenced by the corporation, by its members holding at least 10% of the voting power of any class, or by the attorney general in the case of a public benefit corporation if the court finds that:
(a) (i) the director engaged in fraudulent or dishonest conduct or in gross abuse of authority or discretion with respect to the corporation; or
(ii) a final judgment has been entered finding that the director has violated a duty set forth in 35-2-416 , 35-2-418 , 35-2-435 , or 35-2-436 ; and
(b) removal is in the best interest of the corporation.
(2) The court that removes a director may bar the director from serving on the board for a period prescribed by the court.
(3) If members or the attorney general commence a proceeding under subsection (1), the corporation must be made a party defendant.
(4) If a public benefit corporation or its members commence a proceeding under subsection (1), they shall give the attorney general written notice of the proceeding.
(5) The articles or bylaws of a religious corporation may limit or prohibit the application of this section.

Legislative History

En. Sec. 82, Ch. 411, L. 1991; amd. Sec. 39, Ch. 240, L. 2007.