§ 719 — Liability of directors in certain cases

§ 719. Liability of directors in certain cases.\n (a) Directors of a corporation who vote for or concur in any of the\nfollowing corporate actions shall be jointly and severally liable to the\ncorporation for the benefit of its creditors or shareholders, to the\nextent of any injury suffered by such persons, respectively, as a result\nof such action:\n (1) The declaration of any dividend or other distribution to the\nextent that it is contrary to the provisions of paragraphs (a) and (b)\nof section 510 (Dividends or other distributions in cash or property).\n (2) The purchase of the shares of the corporation to the extent that\nit is contrary to the provisions of section 513 (Purchase or redemption\nby a corporation of its own shares).\n (3) The distribution of assets to shareholders after dissolution of\nthe corporation without paying or adequately providing for all known\nliabilities of the corporation, excluding any claims not filed by\ncreditors within the time limit set in a notice given to creditors under\narticles 10 (Non-judicial dissolution) or 11 (Judicial dissolution).\n (4) The making of any loan contrary to section 714 (Loans to\ndirectors).\n (b) A director who is present at a meeting of the board, or any\ncommittee thereof, when action specified in paragraph (a) is taken shall\nbe presumed to have concurred in the action unless his dissent thereto\nshall be entered in the minutes of the meeting, or unless he shall\nsubmit his written dissent to the person acting as the secretary of the\nmeeting before the adjournment thereof, or shall deliver or send by\nregistered mail such dissent to the secretary of the corporation\npromptly after the adjournment of the meeting. Such right to dissent\nshall not apply to a director who voted in favor of such action. A\ndirector who is absent from a meeting of the board, or any committee\nthereof, when such action is taken shall be presumed to have concurred\nin the action unless he shall deliver or send by registered mail his\ndissent thereto to the secretary of the corporation or shall cause such\ndissent to be filed with the minutes of the proceedings of the board or\ncommittee within a reasonable time after learning of such action.\n (c) 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 (d) 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:\n (1) Upon payment to the corporation of any amount of an improper\ndividend or distribution, to be subrogated to the rights of the\ncorporation against shareholders who received such dividend or\ndistribution with knowledge of facts indicating that it was not\nauthorized by section 510, in proportion to the amounts received by them\nrespectively.\n (2) Upon payment to the corporation of any amount of the purchase\nprice of an improper purchase of shares, to have the corporation rescind\nsuch purchase of shares and recover for their benefit, but at their\nexpense, the amount of such purchase price from any seller who sold such\nshares with knowledge of facts indicating that such purchase of shares\nby the corporation was not authorized by section 513.\n (3) Upon payment to the corporation of the claim of any creditor by\nreason of a violation of subparagraph (a) (3), to be subrogated to the\nrights of the corporation against shareholders who received an improper\ndistribution of assets.\n (4) Upon payment to the corporation of the amount of any loan made\ncontrary to section 714, to be subrogated to the rights of the\ncorporation against a director who received the improper loan.\n (e) A director shall not be liable under this section if, in the\ncircumstances, he performed his duty to the corporation under paragraph\n(a) of section 717.\n (f) This section shall not affect any liability otherwise imposed by\nlaw upon any director.\n