§ 7016 — Liability of directors in certain cases

New York § 7016

• Jurisdiction: New York
• Law BNK: Banking
• Title 7: Directors and Officers
• Art. 15: General Provisions Applicable to Banking Stock Corporations, Limited Liability Investment Companies, and Limited Liability Trust Companies

Text

§ 7016. Liability of directors in certain cases. 1. Directors of a\ncorporation, who vote for or concur in the declaration of any dividend\nor other distribution to stockholders which impairs its capital stock or\nwhile its capital stock is impaired, impairs any surplus fund or reserve\nwhich is not available for dividends under section one hundred ten,\nsection three hundred nine-a or section five hundred seventeen of this\nchapter, or is contrary to any restrictions contained in its\norganization certificate, shall be jointly and severally liable to the\ncorporation for the benefit of its creditors and stockholders, to the\nextent of any injury suffered by such persons, respectively, as a result\nof such action.\n 2. A director who is present at a meeting of the board, or any\ncommittee thereof, at which action specified in subdivision one of this\nsection is taken shall be presumed to have concurred in the action\nunless his dissent thereto shall be entered in the minutes of the\nmeeting, or unless he shall submit his written dissent to the person\nacting as the secretary of the meeting before the adjournment thereof,\nor shall deliver or send by registered mail such dissent to the\nsecretary of the corporation promptly after the adjournment of the\nmeeting. Such right to dissent shall not apply to a director who voted\nin favor of such action. A director who is absent from a meeting of the\nboard, or any committee thereof, at which such action is taken shall be\npresumed to have concurred in the action unless he shall deliver or send\nby registered mail his dissent thereto to the secretary of the\ncorporation or shall cause such dissent to be filed with the minutes of\nthe proceedings of the board or committee within a reasonable time after\nlearning of such action.\n 3. Any director against whom a claim is successfully asserted under\nthis section shall be entitled to contribution from the other directors\nwho voted for or concurred in the action upon which the claim is\nasserted.\n 4. Directors against whom a claim is successfully asserted under this\nsection shall be entitled, to the extent of the amounts paid by them to\nthe corporation as a result of such claims, upon payment to the\ncorporation of any amount of an improper dividend or distribution, to be\nsubrogated to the rights of the corporation against stockholders who\nreceived such dividend or distribution with knowledge of facts\nindicating that it was within the scope of subdivision one of this\nsection, in proportion to the amounts received by them respectively,\nunless such amount has been returned by the stockholder to the\ncorporation.\n 5. A director shall not be liable under this section if, in the\ncircumstances, he discharged his duty to the corporation under section\nseven thousand fifteen.\n 6. This section shall not affect any liability otherwise imposed by\nlaw upon any director.\n