§ 720 — Action against directors and officers for misconduct

New York § 720

• Jurisdiction: New York
• Law BSC: Business Corporation
• Art. 7: Directors and Officers

Text

§ 720. Action against directors and officers for misconduct.\n (a) An action may be brought against one or more directors or officers\nof a corporation to procure a judgment for the following relief:\n (1) Subject to any provision of the certificate of incorporation\nauthorized pursuant to paragraph (b) of section 402, to compel the\ndefendant to account for his official conduct in the following cases:\n (A) The neglect of, or failure to perform, or other violation of his\nduties in the management and disposition of corporate assets committed\nto his charge.\n (B) The acquisition by himself, transfer to others, loss or waste of\ncorporate assets due to any neglect of, or failure to perform, or other\nviolation of his duties.\n (C) In the case of directors or officers of a benefit corporation\norganized under article seventeen of this chapter: (i) the failure to\npursue the general public benefit purpose of a benefit corporation or\nany specific public benefit set forth in its certificate of\nincorporation; (ii) the failure by a benefit corporation to deliver or\npost an annual report as required by section seventeen hundred eight of\narticle seventeen of this chapter; or (iii) the neglect of, or failure\nto perform, or other violation of his or her duties or standard of\nconduct under article seventeen of this chapter.\n (2) To set aside an unlawful conveyance, assignment or transfer of\ncorporate assets, where the transferee knew of its unlawfulness.\n (3) To enjoin a proposed unlawful conveyance, assignment or transfer\nof corporate assets, where there is sufficient evidence that it will be\nmade.\n (b) An action may be brought for the relief provided in this section,\nand in paragraph (a) of section 719 (Liability of directors in certain\ncases) by a corporation, or a receiver, trustee in bankruptcy, officer,\ndirector or judgment creditor thereof, or, under section 626\n(Shareholders' derivative action brought in the right of the corporation\nto procure a judgment in its favor), by a shareholder, voting trust\ncertificate holder, or the owner of a beneficial interest in shares\nthereof.\n (c) This section shall not affect any liability otherwise imposed by\nlaw upon any director or officer.\n