§ 17-16-831 — Standards of liability for directors

Wyoming § 17-16-831

• Jurisdiction: Wyoming
• Title 17: Corporations, Partnerships and Associations
• Ch. 16: WYOMING BUSINESS CORPORATION ACT
• Art. 8: DIRECTORS AND OFFICERS

Text

(a) A director shall not be liable to the corporation or
its shareholders for any decision to take or not to take action,
or any failure to take any action including abstaining from
voting after full disclosure, as a director, unless the party
asserting liability in a proceeding establishes that:
(i) No defense interposed by the director based on
the following precludes liability:
(A) Any provision in the articles of
incorporation authorized by W.S. 17-16-202(b)(iv); or
(B) The protection afforded by W.S. 17-16-861
for action taken in compliance with W.S. 17-16-862 or 17-16-863;
or
(C) The protection afforded by W.S. 17-16-870;
and
(ii) The challenged conduct consisted or was the
result of:
(A) Action not in good faith; or
(B) A decision:
(I) Which the director did not reasonably
believe to be in or at least not opposed to the best interests
of the corporation; or
(II) As to which the director was not
informed to an extent the director reasonably believed
appropriate in the circumstances; or
(C) Lack of objectivity due to the director's
familial, financial or business relationship with, or a lack of
independence due to the director's domination or control by,
another person having a material interest in the challenged
conduct:
(I) Which relationship or which domination
or control could reasonably be expected to have affected the
director's judgment respecting the challenged conduct in a
manner adverse to the corporation; and
(II) After a reasonable expectation to such
effect has been established, the director shall not have
established that the challenged conduct was reasonably believed
by the director to be in or at least not opposed to the best
interests of the corporation; or
(D) A sustained failure of the director to
devote attention to ongoing oversight of the business and
affairs of the corporation, or a failure to devote timely
attention, by making or causing to be made appropriate inquiry,
when particular facts and circumstances of significant concern
materialize that would alert a reasonably attentive director to
the need therefore; or
(E) Receipt of a financial benefit to which the
director was not entitled or any other breach of the director's
duties to deal fairly with the corporation and its shareholders
that is actionable under applicable law.
(b) The party seeking to hold the director liable:
(i) For money damages, shall also have the burden of
establishing that:
(A) Harm to the corporation or its shareholders
has been suffered; and
(B) The harm suffered was proximately caused by
the director's challenged conduct.
(ii) For other money payment under a legal remedy,
such as compensation for the unauthorized use of corporate
assets, shall also have whatever burden of proof may be called
for to establish that the payment sought is appropriate in the
circumstances; or
(iii) For other money payment under an equitable
remedy, such as profit recovery by or disgorgement to the
corporation, shall also have whatever burden of proof may be
called for to establish that the equitable remedy sought is
appropriate in the circumstances.
(c) Nothing contained in this section shall:
(i) In any instance where fairness is at issue, such
as consideration of the fairness of a transaction to the
corporation under W.S. 17-16-861(b)(iii), alter the burden of
proving the fact or lack of fairness otherwise applicable;
(ii) Alter the fact or lack of liability of a
director under another section of this act, such as the
provisions governing the consequences of an unlawful
distribution under W.S. 17-16-833 or a transactional interest
under W.S. 17-16-861; or
(iii) Affect any rights to which the corporation or a
shareholder may be entitled under another statute of this state
or the United States.