10-833. Liability for unlawful
distributions
A. A director who votes for or assents to a distribution made in violation of
section 10-640 or the articles of incorporation is personally liable to the corporation
for the amount of the distribution that exceeds what could have been distributed without
violating section 10-640 or the articles of incorporation if it is established that the
director's duties were not performed in compliance with section 10-830.
B. A director of a corporation who is present at a meeting of its board of
directors at which action on any distribution in violation of section 10-640 is taken is
presumed to have assented to the action taken unless his dissent is entered in the
minutes of the meeting or unless he files his written dissent to the action with the
secretary of the meeting before the adjournment of the meeting or forwards the dissent by
registered or certified mail to the secretary of the corporation before 5:00 p.m. of the
next business day after the adjournment of the meeting. The right to dissent does not
apply to a director who voted in favor of the action.
C. A director who is held liable under subsection A of this section for an unlawful
distribution is entitled to contribution from:
1. Every other director who could be held liable under subsection A of this section
for the unlawful distribution.
2. Each shareholder for the amount the shareholder accepted knowing the
distribution was made in violation of section 10-640 or the articles of incorporation.
D. A proceeding under this section is barred unless it is commenced within four
years after the date on which the effect of the distribution was measured under section
10-640, subsection E or G.
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