16-10a-842 - Liability of directors for unlawful distributions. - Utah Statutes

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Statutes > Utah > Title-16 > Chapter-10a > 16-10a-842

16-10a-842. Liability of directors for unlawful distributions.
(1) A director who votes for or assents to a distribution made in violation of Section16-10a-640 or the articles of incorporation is personally liable to the corporation for the amountof the distribution that exceeds what could have been distributed without violating Section16-10a-640 or the articles of incorporation, if it is established that the director's duties were notperformed in compliance with Section 16-10a-840. In any proceeding commenced under thissection, a director has all of the defenses ordinarily available to a director.
(2) A director held liable under Subsection (1) for an unlawful distribution is entitled tocontribution:
(a) from every other director who could be held liable under Subsection (1) for theunlawful distribution; and
(b) from each shareholder, who accepted the distribution knowing the distribution wasmade in violation of Section 16-10a-640 or the articles of incorporation, the amount of thecontribution from each shareholder being the amount of the distribution to the shareholdermultiplied by the percentage of the amount of distribution to all shareholders that exceeded whatcould have been distributed to shareholders without violating Section 16-10a-640 or the articles ofincorporation.
(3) A proceeding under this section is barred unless it is commenced within two yearsafter the date on which the effect of the distribution is measured under Subsection 16-10a-640(5)or (7).

Enacted by Chapter 277, 1992 General Session

State Codes and Statutes

Statutes > Utah > Title-16 > Chapter-10a > 16-10a-842

16-10a-842. Liability of directors for unlawful distributions.
(1) A director who votes for or assents to a distribution made in violation of Section16-10a-640 or the articles of incorporation is personally liable to the corporation for the amountof the distribution that exceeds what could have been distributed without violating Section16-10a-640 or the articles of incorporation, if it is established that the director's duties were notperformed in compliance with Section 16-10a-840. In any proceeding commenced under thissection, a director has all of the defenses ordinarily available to a director.
(2) A director held liable under Subsection (1) for an unlawful distribution is entitled tocontribution:
(a) from every other director who could be held liable under Subsection (1) for theunlawful distribution; and
(b) from each shareholder, who accepted the distribution knowing the distribution wasmade in violation of Section 16-10a-640 or the articles of incorporation, the amount of thecontribution from each shareholder being the amount of the distribution to the shareholdermultiplied by the percentage of the amount of distribution to all shareholders that exceeded whatcould have been distributed to shareholders without violating Section 16-10a-640 or the articles ofincorporation.
(3) A proceeding under this section is barred unless it is commenced within two yearsafter the date on which the effect of the distribution is measured under Subsection 16-10a-640(5)or (7).

Enacted by Chapter 277, 1992 General Session

State Codes and Statutes

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State Codes and Statutes

Statutes > Utah > Title-16 > Chapter-10a > 16-10a-842

16-10a-842. Liability of directors for unlawful distributions.
(1) A director who votes for or assents to a distribution made in violation of Section16-10a-640 or the articles of incorporation is personally liable to the corporation for the amountof the distribution that exceeds what could have been distributed without violating Section16-10a-640 or the articles of incorporation, if it is established that the director's duties were notperformed in compliance with Section 16-10a-840. In any proceeding commenced under thissection, a director has all of the defenses ordinarily available to a director.
(2) A director held liable under Subsection (1) for an unlawful distribution is entitled tocontribution:
(a) from every other director who could be held liable under Subsection (1) for theunlawful distribution; and
(b) from each shareholder, who accepted the distribution knowing the distribution wasmade in violation of Section 16-10a-640 or the articles of incorporation, the amount of thecontribution from each shareholder being the amount of the distribution to the shareholdermultiplied by the percentage of the amount of distribution to all shareholders that exceeded whatcould have been distributed to shareholders without violating Section 16-10a-640 or the articles ofincorporation.
(3) A proceeding under this section is barred unless it is commenced within two yearsafter the date on which the effect of the distribution is measured under Subsection 16-10a-640(5)or (7).

Enacted by Chapter 277, 1992 General Session