§ 720 — Actions against directors, officers and key persons

§ 720. Actions against directors, officers and key persons.\n (a) An action may be brought against one or more directors, officers,\nor key persons of a corporation to procure a judgment for the following\nrelief:\n (1) To compel the defendant to account for his official conduct in the\nfollowing 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 (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 are reasonable grounds for belief that\nit will be made.\n (b) An action may be brought for the relief provided in this section\nand in paragraph (a) of section 719 (Liabilities of directors in certain\ncases) by the attorney general, by the corporation, or, in the right of\nthe corporation, by any of the following:\n (1) A director or officer of the corporation.\n (2) A receiver, trustee in bankruptcy, or judgment creditor thereof.\n (3) Under section 623 (Members' derivative action brought in the right\nof the corporation to procure a judgment in its favor), by one or more\nof the members thereof.\n (4) If the certificate of incorporation or the by-laws so provide, by\nany holder of a subvention certificate or any other contributor to the\ncorporation of cash or property of the value of $1,000 or more.\n (c) In a corporation having no members, an action may be brought by a\ndirector against third parties to obtain a judgment in favor of the\ncorporation. The complaint shall set forth with particularity the\nefforts of the plaintiff to secure the initiation of such action by the\nboard or the reason for not making such efforts. The court in its\ndiscretion shall determine whether it is in the interest of the\ncorporation that the action be maintained, and if the action is\nsuccessful in whole or in part, what reimbursement if any should be made\nout of the corporate treasury to the plaintiff for his reasonable\nexpenses including attorney's fees, incurred in the prosecution of the\naction.\n